J.P. Morgan TARP Warrants: Attractively Priced, Leveraged Investment

Christian Olesen presented his in-depth investment thesis on J.P. Morgan TARP Warrants (JPM) at Best Ideas 2015.

J.P. Morgan TARP Warrants: At $18.50, the JPMorgan TARP warrants are an attractively priced, leveraged investment in JPMorgan stock. At $59.07, the stock trades at a very modest 34% premium to tangible book value, or 10.9x trailing earnings, which we think is far too low for this high-quality franchise. Based on a conservative valuation of only 1.5x tangible book value, growing at a very conservative 10% per year, the warrants will return 27% annualized through expiration in Oct 2018.

About the instructor:

Christian is the investment manager of the Olesen Value Fund. Previously, Christian worked in a dual role of Analyst and Trader for Xaraf Management, a group within Paloma Partners that focuses on a variety of equity and credit strategies. Before that, Christian was Senior Associate in the research department of DebtTraders Group, a New York-based broker-dealer specializing in distressed and high yield bonds, and Senior Financial Analyst in the corporate finance advisory services group of Stern Stewart & Co., a New York-based financial advisory firm best known for its proprietary EVA® (Economic Value Added) concept. Christian holds a B.S. in Economics, with concentrations in Finance and Accounting, from The Wharton School, University of Pennsylvania. He also holds the CFA (Chartered Financial Analyst) designation.

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