Historically, tumultuous times offer some of the best opportunities to buy stocks, and the market's recent mess surely qualifies. Most investors would probably wince at the notion of buying a bank stock today, but a surprising number of investors have that warm, fuzzy feeling for JPMorgan Chase (NYSE: JPM).
In our Motley Fool CAPS community, nearly 82% of the 3,484 investors rating the company are bullish, giving plenty of reasons why JPMorgan Chase will thrive, three of which I've highlighted below.
But here at The Motley Fool, we're all for looking at both the good and bad sides of an investment. Once you're done with this article, you can read the case against JPMorgan Chase, weigh in with your own comments below, or rate JPMorgan Chase in CAPS.
1. Strong profit
Although the financial world was on the brink of collapse a year ago, things aren't looking so dire for leading banks these days. Similar to peer Goldman Sachs (NYSE: GS), JPMorgan pulled in another outstanding quarter, reporting $3.6 billion in net income, with revenue of $28.8 billion, as fixed-income trading is now carrying the earnings torch.
2. Stabilization
Despite setting aside more money for potential credit losses, JPMorgan's third quarter was the first time since it purchased Washington Mutual last year that assets and deposits didn't shrink. Some say it got a better deal on the acquisition than deals nabbed around the same time by Bank of America (NYSE: BAC) and Wells Fargo (NYSE: WFC). JPMorgan now has a strong retail presence in places where it had virtually none before.
3. Competitive position
In addition to traditional banking, JPMorgan Chase has an additional side of its business that some CAPS members see as a huge advantage over smaller regionals like SunTrust (NYSE: STI), Fifth Third (Nasdaq: FITB), and BB&T (NYSE: BBT): massive capital market operations. The bank has been essentially printing money in recent quarters, which has offset credit losses, and it's even considering bumping its dividend higher due to the extra capital available.
To see details of what CAPS members are saying now about JPMorgan Chase, just click on over to Motley Fool CAPS and have a look. Or add your thoughts directly to this story in the comments box below. And do yourself a favor and check out our "3 Reasons to Sell JPMorgan Chase Today" article so you've got both sides of the picture.
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