Bill Rutherford is featured in the upcoming print edition of BusinessWeek – “Inside Wall Street” column.

May 4, 2009 Issue (posted online April 22, 2009)

Article link: chan=magazine+channel_personal+business

In mid-2007, holding stock in financial outfits became taboo at Rutherford Investment Management, whose composite growth portfolio has snagged a five-star rating from Morningstar (MORN ) for the past five years. But a year later, Rutherford hopped back into financials. It bought shares of JPMorgan Chase (JPM ), the global banking giant with assets of $3.2 trillion and operations in more than 50 countries. JPMorgan now offers what a long-term growth investor like Rutherford requires for its portfolio: a cheap, “best in class” bank and a “fortress” company with huge potential, says the firm’s president, William Rutherford. JPM’s global franchise will help it “come out stronger” from the financial crisis, he adds. Like most other banks, JPM shares have been battered-falling to 14.96 on Mar. 6, down from a 52-week high of 50.63 last Oct. 3. Its strong investment banking unit helped it post better-than-forecast first- quarter profits, and it had climbed to 31.90 by Apr. 22.

As JPMorgan “continues to take market share in most of its businesses, we view it as one of the group’s better performers,” notes Jason Goldberg of Barclays Capital (BCS ) (it has done banking for JPM). He rates the stock overweight, with a 12-month target of 42. Goldberg expects earnings of $1.75 a share in 2009 and $3 in 2010, vs. 2008’s $1.40.

Unless otherwise noted, neither the sources cited in Inside Wall Street nor their firms hold positions in the stocks under discussion. Similarly, they have no investment banking or other financial relationships with them.

by Gene Marcial