BOSTON (TheStreet) -- As some investors in *JPMorgan Chase*(JPM) will
follow the bank's fourth-quarter results, due Friday, to see if
there's a dividend increase, Robert Bacarella says the bank's outlook
is of greater importance.
Bacarella, manager of the *Monetta Young Investor Fund*(MYIFX),
purchased JPMorgan along with *Bank of America*(BAC) and
*Citigroup*(C) as a package on expectations the banking sector is on
the mend. JPMorgan "is the cream of the crop," the manager said.
"We're starting to see an improvement in earnings after the whole
episode in 2008 with the financial crisis," he says. "We pay attention
to price movement as a leading indicator. We're seeing increasing
buying coming into the banking sector from institutions. We're seeing
price movement that is beginning to exceed six-month highs. Plus, the
outlook is beginning to improve."
JPMorgan is the fund's top pick in the banking sector, and Bacarella
expects the stock to easily outpace the broader market this year. For
the Monetta Young Investor Fund, that's a critical characteristic when
it comes to portfolio management.
The Monetta Young Investor Fund's key objective is to beat the return
of the *S&P 500*, which it accomplishes by investing about half of its
net assets in funds that track the S&P 500. The remaining assets are
devoted to industry leaders with highly recognizable brands. In
addition to JPMorgan and the other bank stocks, the fund counts
*Apple*(AAPL), *Ford*(F) and *Google*(GOOG) among its holdings.
In terms of performance, the Monetta Young Investor Fund performs as
intended. The fund has average annual returns over one and three years
(23.7% and 10.7%, respectively) that handily beat the S&P 500 (12% and
minus 15%, respectively). Since its Dec. 12, 2006, inception, the fund
has an average annual return of 9.1%, compared with a 10.8% decline
for the S&P 500.
Although Bacarella expects JPMorgan to outpace the market in 2011, he
acknowledges that he has concerns as the bank preps to release its
fourth-quarter financial results. In particular, Bacarella is cautious
in his enthusiasm about what JPMorgan CEO Jamie Dimon will offer in
terms of business outlook.
Source: Thestreet.com
