New Recommendation – JPMorgan Chase & Co (NYSE: JPM)
The largest lender in the U.S. is now using blockchain. The bank also just announced they plan to hire about 2,000 more software developers worldwide by the end of the year according to Lori Beer, the chief information officer. JPM is making huge investments in computer science while other competitor financial institutions have lagged. JPM plans to spend $14 billion dollar on technology this year.
At this valuation we believe the risk/reward is compelling and it is a good entry point to begin a position in the stock.
Investment Thesis:
- The company has consistently grown revenue, and generates $132 billion in annual operating cash flow
- Forward P/E ratio of 8.51 suggests a very fair value
- $1.00 per share quarterly dividend, annual 3.8% yield
- The rising interest rate environment will help the bank. Over the past 30 days earnings estimates have risen by almost 1%
- The 2022 IPO market is currently on pause which has heavily impacted JPM’s investment banking division – this is now fully priced into the stock and there is upside going into 2023-2024
- JPM stock is very oversold, with an RSI indicator at 29
- The stock is trading in a channel pattern and can break to the upside from here.
We are keeping both eyes on Onyx Digital Assets – JPM’s blockchain arm. Bloomberg reported that JPM has developed a collateral management blockchain solution for traditional financial services. In May, JPM executed their first tokenized transactions including a tokenized version of the BlackRock money market fund. These blockchain-based digital tokens are now being used as collateral in traditional financial markets!
“What we’ve achieved is the frictionless transfer of collateral assets on an instantaneous basis,” said Ben Challice, JPMorgan’s global head of trading services. While the asset was a money market fund in this case, it plans to tokenize equities, fixed income and other asset types on its enterprise blockchain network.
JPM plans to tokenize U.S. treasuries and money market fund shares to be used as collateral in DeFi (decentralized finance) pools. This should help the bank to bring trillions of dollars of new tokenized assets to DeFi. BUY A QUARTER
Other:
- Here’s a great short video clip of congressional testimony over why Bitcoin has value – link
Equity Portfolio
| Ticker | Initial Weight | Price | Price at Rec | Performance | Rating |
| Arista Networks (ANET) | 2.50% | 115.83 | 105.00 | 10.31% | BUY A QUARTER |
| JPMorgan (JPM) | 2.50% | — | 107.73 | — | BUY A QUARTER |
| Nvidia (NVDA) | 2.50% | 125.12 | 188.20 | -33.52% | BUY A QUARTER |
| Okta Inc. (OKTA) | 2.50% | 57.82 | 95 | -39.14% | BUY A HALF |
| Proshares Strategy Bitcoin ETF (BITO) | 2.50% | 12.06 | 25.93 | -53.49% | BUY A QUARTER |
| Block Inc. (SQ) | — | 55.78 | — | — | WATCH |
| Concord Acquisition (CND) | — | 10.07 | — | — | WATCH |
| CrowdStrike (CRWD) | — | 169.31 | — | — | WATCH |
| Galaxy Digital (GLXY.TO) | — | 6.20(CAD) | — | — | WATCH |
| Proshares Short Bitcoin ETF (BITI) | — | 38.08 | — | — | WATCH |
| Unity (U) | — | 33.94 | — | — | WATCH |
Crypto Portfolio
| Ticker | Initial Weight | Price | Price at Rec | Performance | Rating |
| ETH | 18.0% | 1,317.90 | 3,444.22 | -61.74% | BUY A HALF |
| ENS | 7.00% | 15.40 | 10.22 | 50.68% | BUY A HALF |
| MATIC | 7.00% | 0.80 | 0.678 | 18.17% | BUY A HALF |
| APE | — | 5.14 | — | — | WATCH |
| SOL | — | 32.95 | — | — | WATCH |
| HNT | — | 4.92 | — | — | WATCH |
| STEPN | — | 0.6212 | — | — | WATCH |
| AVAX | — | 16.98 | — | — | WATCH |
| LINK | — | 7.23 | — | — | WATCH |