Making new highs is significant from an investor psychology standpoint because it means that everyone who has bought shares in the last year is sitting on gains. As a result, the "back to even" mentality is less of a concern than it would be for a name with a higher proportion of shareholders sitting on losses.
For traders who want to ride the bullish momentum, there's still time to build a position in JPMorgan now.
In addition, TheStreet Ratings team rates JPMorgan Chase as a buy with a ratings score of A-. TheStreet Ratings team has this to say about its recommendation:
"We rate JPMorgan Chase a buy. This is based on the convergence of positive investment measures, which should help this stock outperform the majority of stocks that we rate. The company's strengths can be seen in multiple areas, such as its revenue growth, solid stock price performance, growth in earnings per share, increase in net income and good cash flow from operations. Although the company may harbor some minor weaknesses, we feel they are unlikely to have a significant impact on results."
Highlights from the analysis by TheStreet Ratings team include:
- JPMorgan's revenue growth has slightly outpaced the industry average of 0.1%. Since the same quarter one year prior, revenues slightly increased by 3.3%. Growth in the company's revenue appears to have helped boost the earnings a share.
- The stock has not only risen over the past year, it has done so at a faster pace than the S&P 500, reflecting the earnings growth and other positive factors similar to those we have cited here. Turning our attention to the future direction of the stock, it goes without saying that even the best stocks can fall in an overall down market. However, in any other environment, this stock still has good upside potential despite the fact that it has already risen in the past year.
- JPMorgan has improved earnings per share by 13.3% in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings a share growth over the past year. We feel that this trend should continue. During the past fiscal year, JPMorgan increased its bottom line by earning $5.29 versus $4.32 in the prior year. This year, the market expects an improvement in earnings ($5.85 versus $5.29).
- The company, on the basis of net income growth from the same quarter one year ago, has significantly outperformed against the S&P 500 and exceeded that of the commercial banks industry average. The net income increased by 12.1% when compared to the same quarter one year prior, going from $5,274.00 million to $5,914.00 million.
- Net operating cash flow has slightly increased to $14,879.00 million or 1.44% when compared to the same quarter last year. The firm also exceeded the industry average cash flow growth rate of -37.29%.