Why Is Rep. Trey Hollingsworth Investing in This Bank?
Bank stocks are relatively outperforming the market this year with Invesco KBW Regional Banking ETF (KBWR: US) down only 6.6% year-to-end, compared to a 23% drop witnessed in the S&P 500.
Major banking companies opened the Q3 earnings season last week with some results coming in better than feared. It seems that Congressman Trey Hollingsworth is betting that at least one major bank can see its shares outperform going forward.
The U.S. representative for Indiana's 9th congressional district reported today that he invested between $500,000 - $1 million in JPMorgan Chase & Co (JPM: US) Auto Callable Contingent Interest Notes on October 4. JPMorgan shares trade about 3-4% higher today compared to October 4.
The JPMorgan transaction comes after Mr. Hollingsworth invested between $500,000 - $1 million in the National Bank of Canada (NTIOF: US) stock in early September. The Congressman was buying shares of NA when the market closed at $65.95, slightly higher compared to today’s price of around $64.
Republican Hollingsworth often trades financial stocks, although Energy is still his favorite sector for trading. In terms of the volume traded, the Congressman’s top stock is Enterprise Products Partners (EPD: US), a midstream natural gas and crude oil pipeline company with headquarters in Houston, Texas.
JPMorgan shares gained last week after the bank posted better-than-expected results for the third quarter. CEO Jamie Dimon commented:
“JPMorgan Chase delivered solid performance across our businesses as we generated $9.7 billion in net income, $32.7 billion in revenue, an ROTCE of 18%, and a CET1 capital ratio of 12.5%.”
Interestingly, JPMorgan reported a 43% drop YoY in Investment Banking revenue.
