A company’s management can make or break a business. Some managers are so good that they can even become household names. Most aren’t so lucky. That’s how rare that quality is.
In today’s markets, with nearly everything selling off, great companies with strong management are seeing their share price sag even if they’re setting up their business to prosper with the next economic turnaround.
One case in point is Jamie Dimon, CEO at JPMorgan Chase (JPM). The bank has sagged nearly 30 percent in the past year, dropping more than the overall market thanks to a slowdown in M&A activity and concerns over higher interest rates impacting bank stocks.
But as the industry’s best-known CEO, it’s likely that things will turn around. That may be why analysts have gotten bullish on the bank, which has even sunk behind peers lately.
Action to take: Shares look worth picking up for the long haul here. The stock trades at under 10 times earnings, and the company is at its cheapest valuation to its assets since the pandemic. Plus, the 34 percent profit margin makes the bank an attractive long-term play. Investors can get a 3.5 percent starting dividend yield with room for more increases in time.
For traders, a rebound later in the year looks likely. The January 2023 $130 calls, last going for about $3.75, could potentially get a bit cheaper in the coming weeks on another market decline. But for a year-end rally, they’re poised for strong returns, and could likely move in-the-money before a year-end rally is over.
Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any of the companies mentioned in this article.