Is it a Wise Decision to Sell Your JPMorgan (JPM) Shares?

Giverny Capital, an asset management firm, published its fourth-quarter 2021 investor letter – a copy of which can be downloaded here. A quarterly net return of 10.73% was delivered by the fund for the fourth quarter of 2021, slightly below its benchmark, the S&P 500 Index, which delivered an 11.03% gain for the same period. Spare some time to check the fund’s top 5 holdings to have a clue about their top bets for 2022.

Giverny Capital Asset Management, in its Q4 2021 investor letter, mentioned JPMorgan Chase & Co. (NYSE: JPM) and discussed its stance on the firm. JPMorgan Chase & Co. is a New York, New York-based investment banking company with a $431.6 billion market capitalization. JPM delivered a -7.41% return since the beginning of the year, while its 12-month returns are up by 13.94%. The stock closed at $146.61 per share on January 28, 2022.

Here is what Giverny Capital Asset Management has to say about JPMorgan Chase & Co. in its Q4 2021 investor letter:

“I sold some of our JP Morgan Chase in the fourth quarter, redeploying the proceeds and a bit of available cash into M&T Bank. JP Morgan is the nation’s best giant bank and I am optimistic about its
future. GCAM still owns some. But M&T has a multi-decade record of excellent results, a strong balance sheet and conservative loan loss reserves. Importantly, it is extremely sensitive to rising interest rates.

JP Morgan generates income from traditional bank lending, but also from trading, investment banking and wealth management. It is the nation’s largest credit card issuer and also does business with about 80% of the Fortune 500. M&T is more oriented to commercial real estate lending and could be a major beneficiary of higher interest rates, as it has a lot of excess cash on its balance sheet and a stable core deposit base. As rates rise, it will have plenty of ability to make loans. Alternatively, M&T could buy back a lot of stock with that surplus cash.”

Pixabay/Public Domain

Our calculations show that JPMorgan Chase & Co. (NYSE: JPM) ranks 17th on our list of the 30 Most Popular Stocks Among Hedge Funds. JPM was in 101 hedge fund portfolios at the end of the third quarter of 2021, compared to 108 funds in the previous quarter. JPMorgan Chase & Co. (NYSE: JPM) delivered a -13.70% return in the past 3 months.

In October 2021, we also shared another hedge fund’s views on JPM in another article. You can find other letters from hedge funds and prominent investors on our hedge fund investor letters 2021 Q4 page.

Disclosure: None. This article is originally published at Insider Monkey.