Stocks in the News: Government Just Can't Leave JP Morgan Alone

Crista Huff
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Posted: Aug 30, 2013 12:01 AM
Stocks in the News: Government Just Can't Leave JP Morgan Alone

Stock number one is: 

JPMorgan Chase & Co., (SYMBOL: JPM) and the headline says: JPMorgan Bribe Probe Said to Expand in Asia as Spreadsheet Is Found -- Bloomberg

We recently reported that JPMorgan Chase is ujp mornder investigation by the SEC’s anti-bribery unit for hiring decisions which may have been made in order to win banking business in China.  Now an internal spreadsheet comes to light, linking appointments to specific deals pursued by the bank, reports Bloomberg.  However, it is unclear whether any crime has been committed.

JPMorgan is also being investigated for crimes and improprieties in the areas of energy-trading, mortgage-backed securities, balance sheet misstatements, derivatives losses, money-laundering, foreclosures, and credit-card collections.

Earnings growth prospects at JPMorgan Chase are minimal.  We would look elsewhere for growth stock opportunities.

Our Ransom Note trendline says:  SELL JPMORGAN.

<a href="http://ycharts.com/companies/JPM/chart/#/?series=calc:price,type:company,id:JPM,,&maxPoints=650&zoom=ytd&format=real"><img src="http://media.ycharts.com/charts/50166b28ca13531d3317bd2927ed05d2.png" alt="JPM Chart" /></a><p style="font-size: 10px;"><a href="http://ycharts.com/companies/JPM">JPM</a> data by <a href="http://ycharts.com">YCharts</a></p>

Stock number two is: 

Zurich Insurance Group Ltd., (SYMBOL: ZURVY) and the headline says: Zurich chairman resigns over CFO's apparent suicide -- CNBC

Zurich Insurance Chairman Josef Ackermann has resigned in the wake of the apparent weekend suicide of the company’s Chief Financial Officer.  Ackermann commented, “I have reasons to believe that the family is of the opinion that I should take my share of responsibility, as unfounded as any allegations might be.”  Zurich is a Swiss-based multinational company with $60 billion in annual sales.  It’s noteworthy that the CEO of Swisscom, a $12 billion Swiss telecommunications company, also took his own life in July.

Earnings are expected to grow 5 and 14 percent in the next two years.  The dividend yield is 7.33%.  Citi Research likes Zurich’s balance sheet quality and capital strength, but considers the stock fairly valued.

We would avoid Zurich shares due to the bearish chart, and suspicions that “Something is rotten in the Eurozone.”

Our Ransom Note trendline says..... AVOID ZURICH INSURANCE.

<a href="http://ycharts.com/companies/ZURVY/chart/#/?series=calc:price,type:company,id:ZURVY,,&maxPoints=650&zoom=ytd&format=real"><img src="http://media.ycharts.com/charts/ed264a31ce10387d96950ca3341d44e2.png" alt="ZURVY Chart" /></a><p style="font-size: 10px;"><a href="http://ycharts.com/companies/ZURVY">ZURVY</a> data by <a href="http://ycharts.com">YCharts</a></p>

Stock number three is:

Verizon Communications Inc., (SYMBOL:  VZ) and the headline says: Verizon, Vodafone restart talks on $100 billion-plus deal – Wall Street Journal

Verizon Communications and Vodafone Group are in talks to determine whether Verizon might purchase Vodafone’s 45% stake in Verizon Wireless, America’s most profitable mobile-phone company.  The deal could be valued as high as $130 billion, and would require Verizon to raise about $60 billion in financing.

We told investors twice this year to avoid Vodafone stock in favor of Verizon, due to much stronger earnings growth prospects at Verizon; and we reiterated our buy recommendation  this past Monday.

Verizon shares, with a yield of 4.25%, remain very attractive to growth stock investors, with or without complete ownership of Verizon Wireless.

Our Ransom Note trendline says....  BUY VERIZON.

<a href="http://ycharts.com/companies/VZ/chart/#/?series=calc:price,type:company,id:VZ,,&maxPoints=650&zoom=ytd&format=real"><img src="http://media.ycharts.com/charts/15412d610a2ecdbc8db016e4dfbd61bf.png" alt="VZ Chart" /></a><p style="font-size: 10px;"><a href="http://ycharts.com/companies/VZ">VZ</a> data by <a href="http://ycharts.com">YCharts</a></p>

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.