Big Banks. Testimony Of The Tape.

 

 

Cover, Big bank
Mopping up for our sins.  On original release our numbers were a mess.  No longer.  The results are exactly what we’d hoped for; a clear view of the banks.

Mind

bending comments are made daily, and we made some of them.  Money managers talk banks almost daily.  We talked banks as well, when we first release this peice.  Now we’re mopping up.  Our numbers in the final graphic were wrong.  No longer.  And the banks?  Are we to believe the profuse warmth exuded when money movers moon?

Routinely things sound strange, only to become perfectly rational upon a deeper dive.  And the big banks?  And the on-going recommendations?  When you give us a big bank, we’ll respond with a sentence fragments.

 

 

 JPM reported on Friday, beating estimates top and bottom, with EPS OF $2.29, with revenue rising 8.2%y/y.  JPM ended -0.46%.  Citi also reported and ended the session -2.29%.  BAC reported and ended -0.76%.

 

Big banks kicked off earnings season with a dribble.  Were you surprised?  The banks reported last quarter too.  What did they receive for all their efort?  A giant “who cares?”  No shareholder love was forthcoming then, nor is there any now–evidently.  But then again, is anyone surprised?

 

 

building, London, Ben
Moon over a London Whale. In the spring of 2012 news broke of hideous losses steaming out of JPM’s London branch. The so-called “London Whale” Bruno Iksil and built a monstrous derivatives position. One trader’s secret position, became a scandalous loss to the sound of $7 billion.

 

 

 

JPM is considered by many as the best run bank on Wall Street.  That may be so.  Over the past year JPM has driven 18.6% sales growth, along with an 18.2% expanding EPS.   Q2’s results posted an 8.2%y/y revenue growth rate.  They have a net margin of 28.3%, and an 12.1% return on equity.  Mostly striking is the one year EPS growth forecast of 29.3%.  What’s not to love?  Yet, look at the 12-month chart.

 

7-13-18.  JPM Chase(NYSE: JPM).Chart, JPM, COMPX, SPX

 

Financials have taken beating following beating, month following month.  The banks seeming inability to withstand the inevitable events tumbling down the daily market pipe.  We indeed were surpirsed by spread of good to ugly.  Certianly, rising rates have not offered much net interest margin growth as many believed rates would–not yet at least.

 

 

Graphic, runnin'Banks, XX
JPM and BAC stand clear from this crowd. JPM is generally regarded more highly, particularly in terms of management and balance sheet strength.  Returns presented in percenages(Data: Cboe One Real-Time Quote.)(SJGraphic.)

 

Four of our big banks possess all the charm of a dead car battery.  The big banks are not a must own, despite their massive collective market cap.  JPM is the only potential buy we see, BAC being insanely expensive relative to earnings. Options exist, like Paypal, Square, and the cards–MasterCard, Visa.  However, all of the above are very expense.

 

 

 

Thanks for reading.

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Additional resources:

Investopedia.com.  Seriously Wonderful.  Fact.
http://www.investopedia.com/
Charles Schwab.  In Our Opinion, the best broker going.
https://www.schwab.com/public/schwab/client_home
STOCKJAW.COM EARNESTLY THANKS YOU FOR YOUR INTEREST AND WISHES YOU THE VERY BEST.  THE WORLD BEING WHAT IT IS, WE MUST POST THE FOLLOWING:  ALL CONTENT ON STOCKJAW.COM IS PURELY FOR GENERAL EDUCATIONAL AND ENTERTAINMENT PURPOSES ALONE.  ANY ACTION TAKEN BY ANY READER IS THE SOLE CHOICE AND RESPONSIBILITY OF SAID ACTOR.
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