Search This Blog

Tuesday, March 13, 2012

a note on JPM - updated

Wow. My screens actually froze from all the activity from JPM.  Within seconds the stock just spiked.  I thought the Fed indicated they were going to release the result on Thursday, but the news out of JPM makes the results pretty obvious.

A bit of perspective from what JPM told the market:

Prior to today JPM was trading with a dividend yield of 2.4%. JPM raised the dividend by 20%. To get back to a yield of 2.4%, JPM will have to trade at 50.  Yup, 50.

This goes hand-in-hand with the aggressive buy back announced.

I was waiting to sell my light JPM position at 46, around book value.  But with this news, I added and will wait for 50.

This is tremendously bullish. (And as the treasury yield continues to rise, we can start talking about normalized earnings valuations as well.)

update: I got the dividend increase wrong.  Dividend was increased by 20%. The current dividend is $1.00. The forward dividend is $1.20. The yield become 2.7%.

No comments:

Post a Comment