JPMorgan Chase & Co. (NYSE:JPM) is coming off a strong performance in the first quarter of 2013, in which its net income was 15% higher on a q/q basis and 33% above its levels a year earlier. Earnings per share for the quarter were $1.59. Investment banking activities were a major contributor to the improved financials, though consumer banking showed a strong improvement from Q4 2012.
The stock price is currently up over 40% in the last year, though with JPMorgan Chase & Co. (NYSE:JPM)’s asset values also increasing its current market capitalization of about $200 billion is right in line with the book value of the bank’s equity. This valuation also comes out to about 10 times trailing earnings, though as we’ve noted the most recent quarter reflected considerable improvement over what JPMorgan Chase & Co. (NYSE:JPM) had done at various points in 2012. Analysts currently expect $5.72 in earnings for this year, making for a current-year P/E of 9, and we’d note that this figure already includes some expectation that business will cool relative to Q1.
So JPMorgan Chase & Co. (NYSE:JPM) is trading at clear value levels in earnings terms, is not overpriced relative to book value either, and has been achieving growth in its business going by recent reports. As such we think it is worth considering as a value stock, and we’d also note that at current prices and dividend levels it pays an annual yield of just under 3%. There are of course risks in investing in large banks, but for investors interested in the industry we think this makes JPMorgan Chase & Co. (NYSE:JPM) quite competitive with its peers.
We maintain a database of quarterly 13F filings from hundreds of hedge funds and other notable investors, using the included information to help us develop investing strategies; we have found, for example, that the most popular small cap stocks among hedge funds generate an average excess return of 18 percentage points per year. We can also track interest in individual stocks over time, and can see that billionaire Ken Fisher’s Fisher Asset Management owned nearly 13 million shares of JPMorgan Chase as of the end of March (find Fisher’s favorite stocks). D.E. Shaw, a hedge fund managed by billionaire David Shaw, reported a position of 4.1 million shares (see D.E. Shaw’s stock picks).