Each week, Industry Focus: Financials host Jason Moser and Fool.com contributor Matt Frankel CFP each discuss a stock that’s on their radar. Here’s why Moser is watching Travelers (NYSE: TRV) as a great play on the insurance industry, while Frankel is keeping an eye on JPMorgan Chase (NYSE: JPM) after its excellent first-quarter earnings.
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This video was recorded on April 15, 2019.
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Jason Moser: We want to get to One to Watch. Speaking of big banks, I think you have one of those very big banks for One to Watch this week, right?
Matt Frankel: Right. I’m definitely watching JPMorgan Chase. So far, we’ve heard from four major banks. We’ve heard from them, we’ve heard from Wells Fargo, whose earnings were good, but not fantastic. We’ve heard from Goldman Sachs, whose earnings left something to be desired. Citigroup was also a revenue miss, but looked OK. JP Morgan has been the absolute standout of bank earnings so far. They keep growing. Every quarter, I think it can’t get much that much better, they can’t distance themselves that much more above the rest of the pack, and they continue to do so. That return on equity number I mentioned earlier, 16%, I mean, that’s something that would have been unheard of for one of the big banks just a few years ago. So, I think JPMorgan Chase is definitely One to Watch in banking.
Moser: There you go I’m going to throw an insurance company in the mix here, one I’ve talked about before. I used to work there, Travelers, the Big Red umbrella. It has been a very good year thus far for Travelers. They have earnings coming up later this week. I’ll be interested to hear how they see this year setting up. If anything stands out, we’ll certainly be talking about it on next week’s show. I feel like Travelers is one that’s always snuck under the radar here. Certainly, when it comes to our services, it always surprised me that Travelers was never a company that was actually recommended. But it’s one that you hear Buffett talk a lot about. In fact, I think that Berkshire still owns Travelers in their portfolio. I’ll to double check that. But I’m pretty sure they own some of the Travelers companies in their portfolio.
Frankel: It’s one of the few insurance companies they don’t own outright but still invest in.
Moser: Yep. That’s interesting! You talk about those big acquisitions they’re looking for. Maybe that big red umbrella would look very nice underneath that big Berkshire umbrella, perhaps. We’ll see, one day.
Jason Moser has no position in any of the stocks mentioned. Matthew Frankel, CFP owns shares of Berkshire Hathaway (B shares). The Motley Fool owns shares of and recommends Berkshire Hathaway (B shares). The Motley Fool has a disclosure policy.
