U.S. stocks ended sharply higher on Wednesday, with the Nasdaq and S&P 500 closing at their highest levels in more than a year, as fresh data showed that inflation slowed further in June to its smallest annual increase since e
Wall Street was set to open higher on Thursday after
producer prices data provided further evidence of inflation
cooling in the world's largest economy, and stoked hopes that
the Federal Reserve will soon end its monetary policy
tightening.
Below is Validea's guru fundamental report for APPLE INC (AAPL). Of the 22 guru strategies we follow, AAPL rates highest using our Patient Investor model based on the published strategy of Warren Buffett. This strategy seeks out firms with long-term, predictable profitability an
For Immediate ReleaseChicago, IL – July 13, 2023 – Zacks Equity Research shares Boise Cascade BCC as the Bull of the Day and Cross Country Healthcare CCRN as the Bear of the Day. In addition, Zacks Equity Research provides analysi
Launched on 04/09/2020, the BNY Mellon US Large Cap Core Equity ETF (BKLC) is a passively managed exchange traded fund designed to provide a broad exposure to the Large Cap Blend segment of the US equity market.
The Schwab Fundamental U.S. Large Company Index ETF (FNDX) was launched on 08/13/2013, and is a passively managed exchange traded fund designed to offer broad exposure to the Large Cap Value segment of the US equity market.
Every time Apple (NASDAQ: AAPL) has hit a major milestone -- such as a $500 billion market cap, $1 trillion market cap, etc., many investors make the mistake of thinking the company has become too big to continue to produce market-beating returns. And every time, those investors
Apple (
NASDAQ:AAPL
) has enjoyed profound success with its push into the realm of fintech, and its move into the space may be far from over. Despite the potential, Goldman Sachs (
NYSE:GS
) is ready to step back from its consumer ambitions, perhaps moving responsibilities (which include the Apple Card) over to American Express (
NYSE:AXP
), at least according to a
Wall Street Journal report.
Indeed, any Apple Card shift from Goldman Sachs is not an Apple problem; it's more to do with Goldman, which has had mixed results with its consumer push.
Undoubtedly, Goldman Sachs is an investment banking behemoth, so moving into the consumer business was a step outside of its circle of competence. Regardless, if American Express picks up where Goldman Sachs left off, I do think the Amex-Apple partnership is one that could yield a lot of fruit for investors of both companies. Deal or not, though, I stand bullish on
AXP and AAPL at this juncture.
American Express Would be Wise to Take Over for Goldman
American Express and Apple seem like a match made in heaven. First, both companies tend to cater to the very high end of their industries. Apple has its best-in-class smartphones that tend to lean towards the luxury side of the smartphone market. Meanwhile, American Express caters to affluent clientele with its pricy but perk-rich credit cards. Though Goldman Sachs caters to the very wealthy, as well, it's not exactly a consumer-facing brand.
In any case, an Amex-Apple deal is uncertain at this juncture. However, if I were at Amex, it'd be a deal too sweet to pass up. Of course, there will be challenges, as Amex will also be stepping slightly outside of its circle of competence. Regardless, Apple brings a massive customer base that could help Amex gain some meaningful ground over its peers in the credit card scene.
Who knows? The Apple Card may be the first of many offerings to come. I certainly would not be surprised if Amex lays the groundwork for Apple to offer the Apple Card Pro or something of the sort!
For now, I wouldn't get my hopes up for an Amex-Apple deal, as a Wall Street Journal report isn't to be taken as gospel. However, the move does certainly make sense for Goldman and Amex. Goldman can return to its roots by stepping back from the consumer end, while Amex looks to double down on its ambitions and bring its robust brand with it.
Where Will Apple's Financial Services Push Take It Next?
Apple's services push has been a remarkable driver of value for shareholders over the past several years. Indeed, financial services is an area where Apple could expand further. Apple's savings account and its competitive interest rate is a deal too good to pass up for most.
Looking farther ahead, Apple may be ready to go up toe-to-toe against the banks. With Amex aboard potentially, the firm may be able to expand Apple Pay Later to new countries and ramp up its disruption against other financial institutions.
Is AXP Stock a Buy, According to Analysts?
According to TipRanks’ analyst rating consensus, AXP stock comes in as a Hold. Out of 15 analyst ratings, there are six Buys, six Holds, and three Sell recommendations. The
average American Express stock price target is $176.00, implying upside potential of just 1%. Analyst price targets range from a low of $125.00 per share to a high of $205.00 per share.
Is AAPL Stock a Buy, According to Analysts?
Moving onto AAPL, it has a Strong Buy consensus rating based on 24 Buys and seven Hold recommendations. The
average Apple stock price target is $193.57, implying upside potential of 2%. Analyst price targets range from a low of $149.00 per share to a high of $240.00 per share.
The Bottom Line on Apple and Amex
An Apple-Amex deal would be a big win for both companies. Regardless, even if no dotted line gets inked anytime soon, I'd look for both companies to keep moving forward with their ambitions.
Disclosure
Launched in 2017, the
JPMorgan U.S. Quality Factor ETF (
NYSEARCA:JQUA)
is one of a growing number of "quality factor" ETFs offered by asset managers in recent years that look to invest in companies with strong fundamentals such as healthy balance sheets, strong profitability, and earnings growth. Let’s take a look at JQUA and see why it's worthy of investor consideration.
What Does the JQUA ETF Do?
JQUA is JPMorgan’s (
NYSE:JPM
) quality factor ETF with $1.7 billion in assets under management (AUM). JQUA tracks the JP Morgan US Quality Factor Index, and JPMorgan says it “utilizes a rules-based approach that matches Russell 1000 sector weights and selects stocks based on quality and profitability characteristics.”
Its goal is to give its investors exposure to higher-quality stocks while reducing single-stock risks. It invests in large-cap and mid-cap stocks, and in keeping with its theme of "quality," it looks to identify stocks that show "profitability, quality of earnings, and solvency," according to the ETF's prospectus.
One aspect of JQUA that is important for investors to note is that it will invest at least 80% of its funds in this underlying index but that it can invest up to 10% of its assets in exchange-traded futures contracts.
The fund is managed by a seasoned team of four portfolio managers, who collectively boast 61 years of industry experience and 50 years at JPMorgan between them.
JQUA also pays a dividend and currently yields 1.3%.
JQUA features a Neutral ETF Smart Score of 7 out of 10. The
Smart Score is a proprietary quantitative stock scoring system created by TipRanks. It gives stocks a score from 1 to 10 based on eight market key factors. The score is data-driven and does not involve any human intervention. A Smart Score of 8 or higher is equivalent to an Outperform rating, while a Smart Score of 4 to 7 is considered Neutral, placing JQUA at the higher end of the Neutral range.
JQUA's Well-Balanced Portfolio
JQUA is very diversified. Not only does it sports 262 holdings, but its top 10 holdings make up under 20% of the fund, meaning that investors aren’t exposed to undue risk in a handful of large holdings. Below, you’ll find an overview of
JQUA’s top 10 holdings using TipRank’s holdings tool.
Based on JQUA’s investment criteria, it’s unsurprising to see that its top holdings are stocks that most investors would consider to be blue-chip names, such as mega-cap tech names like Meta Platforms (
NASDAQ:META
), Nvidia (
NASDAQ:NVDA
), Apple (
NASDAQ:AAPL
), Microsoft (
NASDAQ:MSFT
) and Alphabet (
NASDAQ:GOOGL
).
However, the fund isn't limited to just technology names. The tech sector makes up 30.9% of the fund, which is its largest weighting, but it also has double-digit percentage weightings in the consumer discretionary sector, healthcare, and industrials. Global payment networks Visa (
NYSE:V
) and Mastercard (
NYSE:MA
) also appear in JQUA's top 10 holdings, as does
Warren Buffett's Berkshire Hathaway (
NYSE:BRK.B
) conglomerate.
Eight of JQUA's top 10 holdings feature Smart Scores of 8 or above (equivalent to an Outperform rating).
Is JQUA Stock a Buy, According to Analysts?
Turning to Wall Street, JQUA has a Moderate Buy consensus rating, as 59.51% of analyst ratings are Buys, 34.91% are Holds, and 5.58% are Sells. At $48.13, the
average JQUA stock price target implies 7.8% upside potential.
Long-Term Performance
JQUA launched in 2017, so while it hasn’t been around for long enough to measure its performance over the course of a decade or more, we can begin to ascertain its long-term track record. As of the end of June, JQUAL had a one-year return of 20.8%. Over a three-year time horizon, it posted an impressive annualized total return of 15%. Lastly, over the past five years, its total annualized return is a solid 12.7%.
JQUA vs. The Market
JQUA’s returns have been solid, but you always want to track an ETF’s performance against the broader market to get a true gauge of how it is performing. Many ETFs fail to beat the market over time. Using the
Vanguard S&P 500 ETF (
NYSEARCA:VOO)
as a proxy for the S&P 500 (
SPX
), we can measure JQUA’s performance against that of the broader market.
As of the end of June, VOO had a total return of 19.5% over the past year and annualized total returns of 14.6% and 12.3% over the past three and five years, respectively. Therefore, JQUA has beaten the broader market over each of these three time frames, albeit by a relatively narrow margin.
Separately, as JQUA focuses on companies with strong balance sheets and healthy profitability, it is worth checking out how it performed during a down market, as these are defensive qualities. In 2022, which was a difficult year for the market, JQUA lost 13.5%, which may not sound great, but it was better than the S&P 500's loss of 18.2%, and it held up far better than the Nasdaq (
NDX
) -- for example, the
Invesco QQQ Trust ETF (
NASDAQ:QQQ)
struggled to a loss of 32.6% last year.
Below, you can take a look at a comparison of JQUA versus VOO using TipRanks' ETF Comparison Tool, which enables investors to compare up to 20 ETFs at a time based on a wide array of customizable criteria.
JQUA Has a Reasonable Expense Ratio
This ETF features a relatively reasonable expense ratio of 0.12%. With this fee structure in place, a JQUA investor putting $10,000 into the ETF would pay $154 over the course of 10 years, assuming the fee remains constant and that the fund returns 5% per year.
Investor Takeaway
There isn't really anything spectacular or novel about JQUA or its strategy of focusing on companies with strong fundamentals, but its diversified portfolio of blue-chip holdings, moderate expense ratio, and market-beating performance (albeit by a slim margin) make it a worthy option for investor consideration.
This isn't the type of ETF that you are buying with the expectation of it going parabolic or soaring to any type of massive short-term gains, as indicated by its Neutral ETF Smart Score and the modest upside potential from analyst ratings. Although that being said, this usually isn't a realistic expectation to begin with. However, it does look like a steady, reliable ETF that investors can view as a solid long-term holding based on the reasons discussed above.
Disclosure
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