Question: JPMorgan Chase & Co (NYSE: JPM) posted a huge profit jump in the first quarter. Is now the time to buy?
Answer:
- JPMorgan is a strong financial company—in our opinion, it is among the top banks along with Wells Fargo & Company (NYSE: WFC), which we own.
- We do not currently hold it in our Traditional Portfolio because we already hold some really strong financial companies.
- We recommend buying it, if you do not already own other financials.
- The company recently raised their dividend to $0.25 a share.
- We feel JPMorgan was managed pretty well coming from the financial crisis.
Question: Cisco Systems, Inc. (NASDAQ: CSCO) is shutting down the Flip Camera, which it bought for more than half a billion a couple of years ago. Is this a sign of weakness? Is now the time to sell?
Answer:
- On one hand you have one of the best networking companies in the world, the backbone of the Internet, while on the other hand they are selling Flip Cameras.
- In our opinion, it does not match up—shutting down Flip was a plus;
- We want to see them build something the company currently offers, i.e., cloud computing, and
- Now you know why news of company purchases, generally, drives down the price of the acquirer’s stock.
- You have to ask: Is Cisco worth $13 a share, net of cash?
- Yes. They own 70% of the switches market and 50% of the router market, and
- Both markets are growing because the need for data is growing.
- However, we feel that the high growth days of the company are over, and management should be paying dividends to the stockholders.
- The company is sitting on billions in cash and not doing anything with it, and
- We feel they are a mature growth company and should begin acting the part.
Disclosures
This article is meant to provide valuable background information on particular investments, NOT a recommendation to buy. The investments referenced within this article may currently be traded by Henssler Financial. All material presented is compiled from sources believed to be reliable and current, but accuracy cannot be guaranteed. The contents are intended for general information purposes only. Information provided should not be the sole basis in making any decisions and is not intended to replace the advice of a qualified professional, such as a tax consultant, insurance adviser or attorney. Although this material is designed to provide accurate and authoritative information with respect to the subject matter, it may not apply in all situations. Readers are urged to consult with their adviser concerning specific situations and questions. This is not to be construed as an offer to buy or sell any financial instruments. It is not our intention to state, indicate or imply in any manner that current or past results are indicative of future profitability or expectations. As with all investments, there are associated inherent risks. Please obtain and review all financial material carefully before investing. Henssler is not licensed to offer or sell insurance products, and this overview is not to be construed as an offer to purchase any insurance products.
