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TheStreet Open House

JPMorgan Remains a Strong Buy

Stocks in this article: JPM C BAC WFC BBT

This makes the loan market highly competitive to the extent that loan pricing becomes the key differentiator among consumers. What this means is that the banks with better credit can offer better rates. Here, too, is where JPMorgan's strong credit, which I referenced earlier, was extraordinarily important. Credit played a solid role in the bank's ability to secure higher mortgage originations and auto loans, both of which grew by double-digit percentage points.

All of these positives aside, I'm not going to pretend JPMorgan is operating on all cylinders. The fact that there was a 27-basis-point year-over-year decline in net interest margin (NIM) caused me a raise an eyebrow. NIM is the metric that tells investors if management made sound investment decisions relative to the bank's debt situation.

Relative to what I've seen from other banks, 27 basis points is not a huge drop, especially considering that JPMorgan has been growing its earning assets. So I want to make sure that I keep this in perspective. But moving forward, this is a situation that bears watching.

Still, I don't believe for a second that this changes anything about JPMorgan's long-term growth prospects. Given the better-than-expected pace of its recovery, I can now see this stock reaching the $60 to $65 range by the end of the year.

At the time of publication, the author held no position in any of the stocks mentioned.

This article was written by an independent contributor, separate from TheStreet's regular news coverage.

Richard Saintvilus is a co-founder of StockSaints.com where he serves as CEO and editor-in-chief. After 20 years in the IT industry, including 5 years as a high school computer teacher, Saintvilus decided his second act would be as a stock analyst - bringing logic from an investor's point of view. His goal is to remove the complicated aspect of investing and present it to readers in a way that makes sense.

His background in engineering has provided him with strong analytical skills. That, along with 15 years of trading and investing, has given him the tools needed to assess equities and appraise value. Richard is a Warren Buffett disciple who bases investment decisions on the quality of a company's management, growth aspects, return on equity, and price-to-earnings ratio.

His work has been featured on CNBC, Yahoo! Finance, MSN Money, Forbes, Motley Fool and numerous other outlets.

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