The #1 bank stock to own right now

Expert reveals the big bank he can't ignore, and why the market may be underestimating it.

Transcript

00:00If you could only buy one big bank right now, given the run-up that we've already seen with

00:04so many of these names, which one would it be, Stephen? That's a good question, and thanks for

00:10putting me on the spot. So yeah, I think JP Morgan tends to lead most lists, and there's a couple of

00:18reasons for that. They do have among the best growth, EPS growth in the group, better loan

00:28growth. They also have very high returns on equity relative to the group. They are dominant in most

00:35of their areas in capital markets. That helps. They're, of course, the largest bank by assets.

00:44They've got the most branches in the U.S. They're expanding that branch network, good efficiency

00:49levels, a well-run bank. So they really score highly across the board in most of the metrics

00:55that analysts are going to look at. And I think that's, and you can say, yeah, the run-up is

01:01certainly there. The valuation is higher than it had been, clearly, but they've got a long

01:10runway for growth. You know, one thing we haven't talked about is the possibility of bank deregulation

01:18as early as late this year. So I think when you look at the big banks, they are also going to be

01:25the biggest beneficiaries of a deregulatory environment for banks to the extent they don't

01:32need to hold quite as much capital. They can use that to lend out. And JP Morgan is the bank that holds

01:39the most amount of capital of any other. And therefore, their ability to use that as a growth

01:47vehicle to lend out to be a little bit more, shall I say, risky in the lending space. And they can

01:57certainly do that if they don't have to have those dollars sit in reserve as a capital requirement.

02:04So I think that's an unknown type of catalyst for bank shares here that's not being fully recognized

02:13by the current valuations.