Stocks in the News: And. . . JP Morgan Making More Headlines

Crista Huff
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Posted: Aug 21, 2013 12:01 AM
Stocks in the News: And. . . JP Morgan Making More Headlines

Stock number one is: 

JPMorgan Chase & Co., (SYMBOL: JPM) and the headline says: JPMorgan faces Department of Justice probe on energy trades -- Reuters

On the heels of arrests in a derivatives scandal, and a new Chinese bribery investigation, JPMorgan Chase is now under investigation for possible manipulation of energy markets.  JPMorgan has already agreed to pay $410 million to end an enforcement action by the Federal Energy Regulatory Commission.  Now various energy issues are being examined by the U.S. Attorney in Manhattan, who’s also leading the investigation into the 2012 JPMorgan derivatives scandal.

With slow earnings growth, a neutral technical chart, and three new recent legal problems, we would look elsewhere for attractive stock investments.

Our Ransom Note trendline says:  SELL JP MORGAN.

JPM Chart

JPM data by YCharts

Stock number two is: 

The Interpublic Group of Cos., Inc. (SYMBOL: IPG) and the headline says: S&P REITERATES BUY OPINION ON SHARES OF INTERPUBLIC GROUP – S&P

Global advertising conglomerate Interpublic Group “announced one of the most progressive media efforts to date, partnering with key cable, television, radio, and digital properties to expand automated purchasing of media,” reports S&P.  “This new consortium brings a more holistic approach to placing advertising across multiple media channels with more targeted placement.”

Interpublic’s earnings growth is subdued this year, but expected to grow 27% next year via margin expansion, and increased sales.  Industry consolidation trends also raise merger potential for Interpublic.  The PE is 19 and the dividend yield is 1.88%.

The stock is on a steady uptrend, currently trading between $15 and $17.

Our Ransom Note trendline says..... BUY INTERPUBLIC GROUP.

IPG Chart

IPG data by YCharts

Stock number three is:

Urban Outfitters Inc., (SYMBOL: URBN) and the headline says: Sunny Urban Skies Amidst Stormy Retail Clouds – Morgan Stanley

Clothing retailer Urban Outfitters has once again surprised Wall Street with a stronger than expected second quarter.  Comparable store sales were up 9%, and eCommerce was up 40%, during a dismal quarter for most soft-goods retailers.  The company reported strong gross margin gains, led by expense controls, and reduced Anthropologie brand merchandise markdowns.  Morgan Stanley is confident that Urban’s management team can continue growing the company through both domestic retail and international eCommerce.

Wall Street expects earnings to grow 18%, 17% and 13% in the next three years.  The  company has no long-term debt.

Urban Outfitters stock broke out of a long-term trading range in January, and has been trading between $38 and $45 all year.

Our Ransom Note trendline says....  BUY URBAN OUTFITTERS.

URBN Chart

URBN data by YCharts

Stocks in the News is produced by Ransom Notes Radio and Goodfellow, LLC. Crista Huff manages Goodfellow LLC, a website that recommends outperforming stocks using fundamental and technical analysis.