Fundamental Analysis: JPM - BAC - C
Updated analysis based in the latest earnings reports
The financial sector acts as a barometer for the overall economy. Understanding the performance of major U.S. banks, especially in light of recent financial results, is crucial for analyzing market trends.
To fully understand the market's trajectory, it's crucial to examine the fundamental performance of key companies within the S&P 500 and Nasdaq 100. Some investors or traders take decisions based on news, and that is a risky tool considering that the stock market is a discount mechanism, remember that sometimes the rumors are bought and the news are sold.
A good fundamental analysis involves a comprehensive examination of a company's financial health, business operations, and industry trends to determine its intrinsic value. Key components include profitability ratios, liquidity ratios (cash), solvency ratios, a study of the company’s business and its strengths in their competitive environment. All those factors are analyzed in this Wednesday’s edition that is presenting regularly fundamental analysis per company groups. The previous editions have analyzed: WMT, COST, AMZN, TGT, SHOP, GOOG, META, TSLA, and NVDA. Today we will delve into big banks: JPM, BAC and C.
(Coming soon: NFLX and Competitors)
Fundamental analysis is valid for longer time than a technical chart, for that reason this library is a tool that you can use between each earnings report.
Use this link to access all the Library of Level Up Your Trading, which includes fundamentals, special studies and technical indicators explained:
https://smartreversals.substack.com/s/level-up-your-trading
For a better understanding of the fundamental editions, and an explanation of the financial indicators analyzed for each company, get access to the educational content that presented all those indicators using actual updated figures for all the 7 tech mega-caps, better known as the Magnificent Seven:
https://smartreversals.substack.com/p/from-charts-to-companies-the-power
(If you subscribe you have access to all the links and the archive)
BANKS - A SECTOR THAT MUST BE STUDIED
By examining key financial metrics and contextualizing them within the broader economic landscape, investors can gain valuable insights into the health of the financial sector and make informed decisions.
Banks gain a competitive advantage primarily through two factors: cost advantages and switching costs. Cost advantages arise from a low-cost deposit base, efficient operations, conservative underwriting, and regulatory considerations.
Economies of scope can create cost advantages by reducing customer acquisition costs. This is particularly true for banks with extensive distribution networks and a wide range of products.
Let’s start:
