JP Morgan (JPM) is one of the world’s banking giants that provides retail and commercial banking under the Chase brand and asset management under the J.P. Morgan brand. The company’s lucrative hedge fund business, which manages wealth for private investors has assets under management (AUM) of $54 billion, making it the second largest hedge fund operation in the world.

Like most of the rest of the banks in the United States, JPM received government money from the bailout of the sector due to the financial crisis in 2008. It repaid the last of the $25 billion it received in late 2009 when the Treasury sold 88.4 million warrants with a conversion price of $42.42 per share. The key takeaway from this event is the green light the company has received to raise its dividend to historic levels. Without government ownership, JPM will have more control over what it does with its cash and cash flows. With each dividend increase, JPM shareholders will likely be rewarded with real price appreciation in the shares.

JPM shares are currently trading around $33, and the mean 12 month price target from analysts researching the stock is $46.97 (43% upside potential). This stock is trading below its 50-day exponential moving average of $33.8, and below its 200-day exponential moving average of $37.9. Technically, the share price has recently turned to the positive leg of a classic Elliot wave, and I would expect the stock to move higher in the medium term.

Earnings per share for the last 12 months are $4.69, and the EPS number is expected to rise to $4.93 in the next fiscal year (ending Dec 2012).  To continue reading, click here