Tags: Bove | JPMorgan | bank | Stock

Bove: Ignore Hoopla Around JPMorgan and Buy Bank’s Stock

Thursday, 14 Jun 2012 09:09 AM

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Rochdale Securities vice president and chief banking analyst Dick Bove says the dog-and-pony-show over JPMorgan is leading investors to miss out on a great bet.

“Who cares about the size of the loss — JPMorgan makes more money than any other banks in the world,” Bove told CNBC. “What matters is that there are only five companies in the entire U.S. that make more money than JPMorgan.”

“Assume JPMorgan earnings are knocked down 25 percent — it will still be one of the 12 biggest earners of any company in the United States. And right now it’s trading at a discount to book – that makes no sense whatsoever.”

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In addition to JPMorgan, Bove believes bank stocks have rarely looked better.

“Banks are flooded with deposits; banks have increased prices on every non-interest product that they’re selling,” he says. “Also, they’re seeing reduction in operating costs and reduction in loan losses. Absolutely everything is going right,” he said.

“And in the last 11 quarters earnings for the industry have been up year over year.”

According to The Washington Post, JPMorgan, now the biggest U.S. bank with $2.3 trillion of assets, grew during the 2008 financial crisis when it acquired Washington Mutual Inc. and Bear Stearns Cos. with the federal government’s support.

Meanwhile, JPMorgan Chase CEO Jamie Dimon told Congress on Wednesday that senior bank executives responsible for a $2 billion trading loss will probably have some of their pay taken back by the company.

"It's likely that there will be clawbacks," Dimon told the Senate Banking Committee, the Associated Press reported.

Under bank policy, Dimon said, stock and bonuses can be recovered from executives, even for exercising bad judgment. The policy has never been invoked, he said.

Editor's Note: Obama Donor Banned This Video But You Can Watch it Here


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