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Closing a Major Financial Position

The company is strong, but the sector faces major headwinds that will persist into next year.
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After you have received this Alert, we are going to sell out of the remaining JPMorgan (JPM) position, which is 2,000 shares, at $40.71.

After listening to several companies at the Goldman Sachs conference today, it is clear the headwinds will persist in 2013 for the bank sector, from sluggish capital markets, net interest margin pressures (due to the flat yield curve) and continued regulatory pressures.

JPMorgan is a strong company and the best in its field. But at this point we prefer Wells Fargo (WFC) in the large- cap arena because of its larger exposure to housing and mortgages. So we'll lock in the 12% gain (we're up 29% from our London Whale buys), and should the stock fall to the mid-$30s, we'll revisit.

We'll hold on to Wells Fargo and KeyCorp (KEY) , and we are waiting for the secondary announcement in American International Group (AIG) before adding to that position (if the stock rallies to mid-$30s, we'll trim it and take profits). We also have MasterCard (MA) on our watch list on a pullback, since we like the secular growth trends from the card processors (the paper-to-plastic theme) and believe MasterCard has sizable market-share opportunities globally.

Regards,

Jim Cramer, Stephanie Link, and TheStreet Research Team

DISCLOSURE: At the time of publication, Action Alerts PLUSwas long JPM, WFC, AIG and KEY.

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