Adage Capital Loads More Cash On the Meridian Bancorp, Inc. (EBSB) Wagon, Should You?

During the first quarter Adage hiked its stake in JPMorgan Chase & Co. (NYSE:JPM) by 26% to 5.93 million shares valued at $359.35 million. JPMorgan Chase & Co. (NYSE:JPM)’s stock has appreciated by almost 10% year-to-date, outperforming the global banks industry, which has gained 4.11% during the same period. The $252.87 billion financial holding company has been in the fund’s portfolio since the fourth quarter of 2001. Following a 20% increase in revenue from its fixed income, currencies and commodities (FICC) unit during the first quarter, JPMorgan Chase & Co. (NYSE:JPM) has climbed to the top spot on the global FICC rankings. Following it were Citigroup Inc (NYSE:C), Goldman Sachs, and Deutsche Bank. During the first quarter, the hedge fund interest in JPMorgan increased, as 95 firms had an aggregate investment of $7.64 billion at the end of March compared to 92 funds with $7.06 billion invested at the end of the previous quarter. Paul Ruddock and Steve Heinz’s Lansdowne Partners is the largest stockholder of JPMorgan Chase & Co. (NYSE:JPM) among them, owning 20.68 million shares valued at $1.25 billion.

After a 2% increase in its Citigroup Inc (NYSE:C) holding during the first quarter, Adage held some 4.8 million shares valued at $247.40 million in the $172 billion financial services holding company. Recently Goldman Sachs upgraded the stock to ‘Buy’ from ‘Neutral’, increasing its price target to $61 from $57. Analyst Richard Ramsden believes that the market is undervaluing the extent to which Citigroup Inc (NYSE:C) can improve its Return on Assets (ROA) in the future by building up on its first quarter performance. However, the impact that the ROA improvement will have on the company Return on Equity will be limited given the company’s deleveraging efforts. Currently, Citi has a total debt-to-equity ratio of 197.23, compared to the industry’s average of 55.71. Boykin Curry‘s Eagle Capital Management is the largest shareholder of Citigroup Inc (NYSE:C) within our database, owning some 26.35 million shares valued at $1.36 billion.

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