J.P. Morgan (the man) may have been one of the best bankers who ever lived. In fact, he was such a major financial player that at times, the U.S. government turned to him to help bail it out of a pickle. If he's looking down from that great bank vault in the sky, he's probably pretty happy with how his namesake bank, JPMorgan Chase (NYSE: JPM ) , is conducting itself during this financial crisis.
Unlike its close competitors Citigroup (NYSE: C ) and Bank of America, JPMorgan has thus far dodged most of the bullets of the recession and the credit crisis -- maybe because it simply has fewer bad bankers. Heck, the bank has been navigating the choppy waters so well that it even got a shout-out from President Obama.
JPMorgan's stock may have lost about half of its value since peaking in 2007, but there have been some gains this year for those confident in the bank's future. Before today's quick drop, timk80 had been the score leader on JPMorgan in Motley Fool CAPS, thanks to an outperform rating that he gave the stock back in late January -- a call that landed him 24 points.
timk80 just started sharing his stock picks in CAPS in December, but he already has a few big winners under his belt. Here's a look at a few of the other prescient picks:
|
Company
|
Date Picked
|
Call
|
Points
|
CAPS Rating
|
|
Research In Motion (Nasdaq: RIMM )
|
Dec. 3, 2008
|
Outperform
|
49
|
**
|
|
Valero (NYSE: VLO )
|
Dec. 12, 2008
|
Outperform
|
32
|
*****
|
|
PotashCorp (NYSE: POT )
|
Dec. 12, 2008
|
Outperform
|
24
|
****
|
Data from CAPS.
So what is this investor looking at these days? Here are a few of his most recent calls on CAPS:
|
Company
|
Date Picked
|
Call
|
CAPS Rating
|
|
ArcelorMittal (NYSE: MT )
|
Jan. 21
|
Outperform
|
****
|
|
Apple (Nasdaq: AAPL )
|
Jan. 20
|
Underperform
|
***
|
|
Citigroup
|
Jan. 20
|
Outperform
|
**
|
Data from CAPS.
While not all of these picks may pan out, they could be a good place to start some further research. I decided to take a closer look at Apple.
The great Apple debate
With more than 20,000 CAPS members weighing in on Apple's stock, it is by far the most-rated stock on CAPS. And what do we get from all of these opinions? The general consensus that Apple is better bought than sold right now.
True, plenty of CAPS investors agree with timk80's underperform rating. Quite a few members have expressed their concerns about Apple, including the recent questions about its leadership as well as the stock's valuation. CAPS member Greatkiller thinks the situation could become even worse:
The Apple trend should die down pretty soon. The kiddies buying ipods will be moving to other things........I cant name any but youll see.
However, as the four-star rating suggests, the vast majority of CAPS members weighing in on Apple's stock -- 19,712 of them, to be exact -- think that Apple will outperform the rest of the market. The reasons are hardly surprising: the dominance of the iPod, the explosion of the iPhone, and the potential for Mac computers to grab more market share. TMFSarahGen recently shared her thoughts on why investors should look to the long term for Apple:
Short term time frame I feel nervous about Apple - what's up with Job's health? the horrid economy? ... Long term time frame ... The Apple story is unbelievably compelling. Just look at the demographics: Apple owns the college market, but they're only 6% of the personal computer market over all. ... They will capture more and more of the adult market as college age people grow up and are a larger part of the whole population.
As for me, I think at 18 times trailing earnings per share and more than 19 times this year's earnings estimates, Apple's stock carries a pretty rich premium over the rest of the market -- particularly for a company that's already valued at nearly $85 billion. That said, I would rather eat a brick of wasabi than step in front of the hurtling freight train that is the Apple brand. The consumer electronics and computer markets are brutally cutthroat, but Apple has done a heck of a job convincing consumers that they should not only buy Apple, but often pay a lot more for the privilege.
But here's the important question: What's your take on Apple? Will the company's strong brand and continued innovation keep it on top, or will competition topple it? Get into the action by clicking over to CAPS. CAPS is absolutely free and already includes more than 125,000 members chipping in to find the best stocks out there.
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