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HEROES

Wal-Mart Stores <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: WMT)") else Response.Write("(NYSE: WMT)") end if %> rang up $11/16 to $46 7/8 after the discount retailing giant reported fourth quarter earnings per share of $0.57, beating the First Call estimate of $0.55. Total Q4 sales jumped 15% to roughly $35.38 billion. Reporting its 27th consecutive year of record sales and earnings growth, the company saw double-digit increases in domestic sales as well. Its international profits -- a key source of future growth -- rose more than tenfold. Although international operations accounted for just 6.4% of total sales for the year, Wal-Mart's international business grew 50% compared with 12% growth for the company overall. The company has a total of 603 stores in Canada, Mexico, Puerto Rico, Argentina, Brazil, and Germany, as well as China and Indonesia (under joint venture or franchise agreements). This compares with the 2,805 stores Wal-Mart operates domestically.

Biopharmaceutical company Somatogen Inc. <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: SMTG)") else Response.Write("(Nasdaq: SMTG)") end if %> rallied $2 1/16 to $8 11/16 after announcing that it has agreed to be acquired by Baxter International <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: BAX)") else Response.Write("(NYSE: BAX)") end if %> for $9 per share in Baxter common stock plus a contingent deferred cash payment of up to $2 per share based on certain revenue milestones. For Somatogen, which suffered a major setback last March when drug maker Eli Lilly & Co. <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: LLY)") else Response.Write("(NYSE: LLY)") end if %> ended its financial support of the firm, the merger with Baxter is just what the doctor ordered. Baxter, which recently suffered a setback of its own with respect to its plans to market its oxygen-carrying human blood substitute HemAssist in Europe in 1998, will consolidate its leading position in the blood substitute market by acquiring Somatogen's man-made hemoglobin research program. Baxter now has the necessary tools to potentially develop a blood product that doesn't increase a patient's blood pressure (like HemAssist), that delivers oxygen faster, and that works longer.

QUICK TAKES: Computer software development company Wonderware Corp. <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: WNDR)") else Response.Write("(Nasdaq: WNDR)") end if %> surged $7 5/8 to $23 5/8 after announcing late yesterday that it has agreed to be acquired by Siebe PLC for $24 per share in cash, or about $375 million... Medical supplies distributor Owens & Minor <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: OMI)") else Response.Write("(NYSE: OMI)") end if %> was lifted $1 1/8 to $17 7/8 after announcing that it has increased its cash dividend for the first quarter to $0.05 per share from $0.045... Asphalt and paving equipment maker Astec Industries <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: ASTE)") else Response.Write("(Nasdaq: ASTE)") end if %> steamed ahead $1 7/8 to $18 3/8 after Raymond James raised its rating on the company to "buy" from "neutral." Yesterday Astec announced fourth quarter earnings of $0.30 per share compared with a loss of $0.17 in Q4 1996.

Allied Waste Industries <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: AWIN)") else Response.Write("(Nasdaq: AWIN)") end if %> picked up $7/8 to $20 1/2 after Deutsche Morgan Grenfell upgraded its rating of the solid-waste management company to "buy" from "accumulate"... Network Associates <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: NETA)") else Response.Write("(Nasdaq: NETA)") end if %> rallied $2 3/8 to $64 3/8 after yesterday's announcement that the enterprise network security and management firm will acquire competitor Trusted Information Systems <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: TISX)") else Response.Write("(Nasdaq: TISX)") end if %> in a stock-for-stock pooling of interest merger valued at more than $300 million... Metrika Systems Corp. <% if gsSubBrand = "aolsnapshot" then Response.Write("(AMEX: MKA)") else Response.Write("(AMEX: MKA)") end if %> added $15/16 to $15 5/16 after reporting fourth quarter EPS of $0.25 compared with the First Call estimate of $0.26. Metrika, which develops online, high-speed process optimization systems for raw-materials analysis and finished-materials quality control, is a subsidiary of Thermo Instrument Systems <% if gsSubBrand = "aolsnapshot" then Response.Write("(AMEX: THI)") else Response.Write("(AMEX: THI)") end if %>, a Thermo Electron <% if gsSubBrand = "aolsnapshot" then Response.Write("(AMEX: TMO)") else Response.Write("(AMEX: TMO)") end if %> company.

Nobility Homes <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: NOBH)") else Response.Write("(Nasdaq: NOBH)") end if %> continued its rally, moving up $1 5/8 to $15 5/8 after the manufactured home company yesterday announced that its preliminary first quarter sales jumped 17% to $10.6 million compared with $9 million in Q1 1997... SLH Corp. <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: SLHO)") else Response.Write("(Nasdaq: SLHO)") end if %> gained $2 to $35 1/4 after announcing that its 31% owned affiliate Syntroleum Corp., which specializes in converting natural gas into synthetic crude oil and transportation fuels, has reached an agreement with a subsidiary of natural gas and electric company Enron Corp. <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: ENE)") else Response.Write("(NYSE: ENE)") end if %> to develop an 8,000 barrel per day gas-to-liquids specialty product plant in Wyoming... Oil and natural gas company Vintage Petroleum <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: VPI)") else Response.Write("(NYSE: VPI)") end if %> spurted up $13/16 to $18 15/16 after announcing that it has entered into an agreement to form a joint venture with TransGlobe Energy Corp. <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: TGLEF)") else Response.Write("(Nasdaq: TGLEF)") end if %> to pursue exploration opportunities in the Republic of Yemen.

Specialty gases distributor Airgas Inc. <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: ARG)") else Response.Write("(NYSE: ARG)") end if %> rose $3/4 to $17 3/4 after announcing that it has completed its acquisition of Con-Gas Inc., a manufacturer and distributor of liquid carbon dioxide and dry ice... Bear Stearns Companies <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: BSC)") else Response.Write("(NYSE: BSC)") end if %> climbed $1 3/16 to $44 13/16 after Schroders raised its rating on the company to "outperform" from "perform in line"... Winstar Communications <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: WCII)") else Response.Write("(Nasdaq: WCII)") end if %> advanced $2 3/16 to $38 after reporting a fourth quarter loss of $2.50 per share compared with a loss of $1.18 per share in the year-earlier period. The telecommunications service provider reiterated its belief that the Q4 loss of $49.5 million before interest, taxes, depreciation, and amortization (EBITDA) is expected to mark the peak in quarterly EBITDA losses. The company believes it will become EBITDA neutral by the end of 1999.

At Home Corp. <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: ATHM)") else Response.Write("(Nasdaq: ATHM)") end if %> gained $2 3/8 to $36 5/16 after yesterday announcing a deal with cable company Tele-Communications Inc. <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: TCOMA)") else Response.Write("(Nasdaq: TCOMA)") end if %> to develop software and services for TCI's digital television set-top boxes. The stock was also helped by reports that rumors had been confirmed regarding talks with telecommunications giant AT&T <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: T)") else Response.Write("(NYSE: T)") end if %> about a possible partnership.

GOATS

Kent Electronics Corp. <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: KNT)") else Response.Write("(NYSE: KNT)") end if %> plummeted $5 3/4 to $21 9/16 after warning yesterday that its fiscal Q4 revenues and earnings will be "sequentially below" its Q3 results and that EPS will fall short of the First Call mean estimate of $0.26 per share. Today, Salomon Smith Barney rubbed salt into the circuitry by downgrading the stock to "outperform" from "buy." The Houston-based specialty electronics distributor and contract manufacturer said fallout from the Asian financial crisis is hurting orders from its clients in the semiconductor equipment sector. Additionally, falling PC prices are cutting into the firm's margins. In its Q3 earnings press release, the company said 40% of Q3 net revenues came from its K*TEC contract manufacturing unit, with most of those sales came from new manufacturing projects such as assembling and testing circuit boards and building specially fabricated power packs. If the company was relying on continued growth in these new businesses to support Q4 earnings, then K*TEC's operations will likely bear much of the brunt for the shortfall when Kent reports Q4 results on March 28.

Shares of online music retailer CDnow Inc. <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: CDNW)") else Response.Write("(Nasdaq: CDNW)") end if %> fell $1 1/2 to $20 today after rumors surfaced that Internet-based bookseller Amazon.com <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: AMZN)") else Response.Write("(Nasdaq: AMZN)") end if %> is on the verge of entering the company's turf by offering musical selections alongside its printed offerings. Fellow online music store NTK Inc. <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: NTKI)") else Response.Write("(Nasdaq: NTKI)") end if %> also dropped $1 5/8 to $24. Amazon already sells a "smaller number of CDs, videotapes and audiotapes" through its website, and now it appears the company is attempting to use its well-positioned brand name and its status as one of the Internet's premier retailers to lure online metal heads to its site. However, it is important to note that all three of these CD purveyors are still awaiting their first quarterly profits, hence, the position that Amazon is the new bully on the online music block might be a bit premature. It still remains to be seen what these companies will be willing to do to gain market share (possibly impacting margins and affecting profitability).

QUICK CUTS: Home improvement retailer Home Depot <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: HD)") else Response.Write("(NYSE: HD)") end if %> lost $3 7/16 to $65 1/8 despite reporting Q4 EPS of $0.41, which was in line with the First Call mean estimate... Semiconductor equipment maker KLA-Tencor Corp. <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: KLAC)") else Response.Write("(Nasdaq: KLAC)") end if %> slipped $1 29/32 to $42 9/16 despite announcing a plan to systematically repurchase 150,000 shares from time to time in the open market. Needham & Co. reiterated its "hold" rating on the stock... Ciena Corp. <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: CIEN)") else Response.Write("(Nasdaq: CIEN)") end if %> fell another $2 1/4 to $37 7/8 after the fiberoptic communications technology company said its Q2 profits would be lower than its recently announced Q1 results due to order delays from one of its major customers, WorldCom Inc. <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: WCOM)") else Response.Write("(Nasdaq: WCOM)") end if %>.

Media Arts Group <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: ARTS)") else Response.Write("(Nasdaq: ARTS)") end if %> dropped $7/8 to $12 3/4 as the retailer of lithographs and reproductions of artist Thomas Kinkade sold 2,405,000 shares at a price of $13 1/2 per share, raising $19.1 million for its coffers. NationsBanc Montgomery Securities started coverage of the stock with a "buy" rating... Drugmaker Pfizer Inc. <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: PFE)") else Response.Write("(NYSE: PFE)") end if %> slumped $1 7/8 to $87 1/2 after the Cash-King Portfolio holding was downgraded by Schroder & Co. and Gruntal & Co... SmithKline Beecham <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: SBH)") else Response.Write("(NYSE: SBH)") end if %> lost $6 to $60 after its proposed merger with fellow drug maker Glaxo Wellcome <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: GLX)") else Response.Write("(NYSE: GLX)") end if %> fell apart. Glaxo lost $6 15/16 to $55 1/2 on the news. Apparently, the two sides could not agree on how the combined company would be managed.

Wireless communications and semiconductor company Motorola Inc. <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: MOT)") else Response.Write("(NYSE: MOT)") end if %> dropped $2 7/8 to $57 5/8 after The Wall Street Journal reported that PrimeCo Personal Communications L.P. cancelled a $500 million order for Motorola's new wireless systems. Instead, the firm will replace almost all of its Motorola equipment with products from rival Lucent Technologies <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: LU)") else Response.Write("(NYSE: LU)") end if %>... Drug delivery company Bergen Brunswig Corp. <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: BBC)") else Response.Write("(NYSE: BBC)") end if %> lost $7 1/8 to $45 after Dow Jones published a story contending that the Federal Trade Commission may challenge the firm's proposed merger with Cardinal Health <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: CAH)") else Response.Write("(NYSE: CAH)") end if %> on antitrust grounds. Cardinal Health fell $6 3/16 to $79 13/16... Another drug industry combination, the proposed linking of McKesson Corp. <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: MCK)") else Response.Write("(NYSE: MCK)") end if %> and AmeriSource Health Corp. <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: AAS)") else Response.Write("(NYSE: AAS)") end if %>, also may be challenged by the Feds. McKesson slipped $2 3/4 to $53 3/16 while AmeriSource was down $3 3/16 to $60 3/16.

Petco Animal Supplies <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: PETC)") else Response.Write("(Nasdaq: PETC)") end if %> was dogged $3 1/2 to $14 after the pet supplies retailer said after the bell yesterday that it expects fiscal 1999 earnings to grow 30% from its fiscal 1998 earnings forecast of $0.87-$0.88 per share. The First Call mean estimate for fiscal 1999 earnings had been $1.39 per share, which would equal 58% growth for the period... Business consulting firm Thomas Group <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: TGIS)") else Response.Write("(Nasdaq: TGIS)") end if %> dropped $1/2 to $8 1/4 after revising its Q4 earnings estimate downward to breakeven from $0.05 per share due to higher-than-expected losses from its software business and a $2.3 million charge to write-off a "significant portion" of its capitalized software and related goodwill.. Thermal printer manufacturer Eltron International <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: ELTN)") else Response.Write("(Nasdaq: ELTN)") end if %> was burned for $3 5/8 to $21 after reporting Q4 EPS of $0.28, missing the street estimate of $0.47.

Detection Systems <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: DETC)") else Response.Write("(Nasdaq: DETC)") end if %> was tripped for a $1 3/16 loss to $8 9/16 after the electronic protection components manufacturer reported fiscal Q3 EPS of $0.02 compared to $0.21 a year ago. The company also said it will re-state earnings downward for its second quarter because of an "incorrect posting in its second quarter accounts payable of approximately $950,000".. Information technology training provider Wave Technologies International <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: WAVT)") else Response.Write("(Nasdaq: WAVT)") end if %> sank $5/8 to $6 5/8 after reporting fiscal Q3 EPS of $0.05, missing the First Call consensus estimate of $0.07... Little Rock, Arkansas-based retailer Dillard's Inc. <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: DDS)") else Response.Write("(NYSE: DDS)") end if %> fell $2 15/16 to $36 5/16 after reporting Q4 EPS of $1.00, which was below the First Call mean estimate of $1.09... Avis Rent A Car <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: AVI)") else Response.Write("(NYSE: AVI)") end if %> ran out of gas today, falling $4 to $30 after agreeing yesterday to buy Avis franchises in four Texas cities for about $200 million. The car rental company also announced plans to issue 5 million new shares of common stock.

Grocery store operator The Great Atlantic & Pacific Tea Co. <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: GAP)") else Response.Write("(NYSE: GAP)") end if %> lost $1 3/16 to $30 3/4 after warning yesterday that it will report lower-than-expected Q4 and fiscal 1998 earnings on Feb. 28. The street had been expecting Q4 earnings of $0.64 per share and fiscal 1998 earnings of $1.95 per share... Oxford Health Plans <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: OXHP)") else Response.Write("(Nasdaq: OXHP)") end if %> dropped $1 1/2 to $18 7/16 after The New York Times said that buyout firm Kohlberg Kravis Roberts & Co. is no longer considering an investment in the troubled managed care company... Consumer finance company FIRSTPLUS Financial Group <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: FP)") else Response.Write("(NYSE: FP)") end if %> lost $2 3/4 to $32 3/16 after being downgraded to "accumulate" from "hold" by Sutro & Co.

Olicom A/S <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: OLCMF)") else Response.Write("(Nasdaq: OLCMF)") end if %> slipped $1 13/16 to $24 13/16 after the data networking company was downgraded to "accumulate" from "buy" by Lazard Freres... Shares of athletic footwear powerhouse Nike Inc. <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: NKE)") else Response.Write("(NYSE: NKE)") end if %> sank $3 9/16 to $43 1/8 on speculation about the company's fiscal Q3 earnings. Indeed, after the market close Nike said Q3 EPS would come in between $0.24-$0.28, below the street estimate of $0.38, due to higher-than-anticipated order cancellations from Asian customers.

[Correction: In yesterday's "Quick Cut" on STB Systems <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: STBI)") else Response.Write("(Nasdaq: STBI)") end if %>, we mistakenly listed a First Call earnings estimate that had not been adjusted for the company's recent stock split. STB's Q1 EPS of $0.33 topped the split-adjusted estimate of $0.32.]

FOOL ON THE HILL
An Investment Opinion
by Dale Wettlaufer

Can Morgan Go It Alone?

J.P. Morgan <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: JPM)") else Response.Write("(NYSE: JPM)") end if %> gained $3 11/16 to $116 after the commercial, investment, and merchant bank and brokerage said it is cutting 700 jobs, or 5% of its total workforce. Dow Jones reported this morning that the company is also considering a merger or an acquisition of another company because of lagging shareholder return and financial performance at the elder of the two U.S. halves of the House of Morgan. In the same article, however, Chairman Sandy Warner was quoted as saying in an internal memo: "It remains our conviction that no strategic merger yet envisioned matches the promise of our own growth strategy if we execute it successfully."

Just as Wells Fargo CEO Paul Hazen said late last year that his company would be stupid not to consider an attractive offer to be bought or to merge, Sandy Warner is saying the same. "Yeah, if we get a rich offer we'd consider it, but for now, forget it" is pretty much what the memo conveys to those on the outside. Is Warner just being coy or is the guy dodging a responsibility to shareholders by operating J.P. Morgan as if public market trading merely serves as a liquidity mechanism for a bunch of bankers with cushy jobs? Value-oriented investors might agree with Warner's assessment, seeing good deal of unrealized potential at an independent J.P. Morgan.

Ideally, the company could shrink its balance sheet radically and redirect its activities to non-commercial banking pursuits. True, the company that was once the preeminent banker to governments and other bankers would be departing from its roots, but the days of captive clients and good margins in commercial banking are long gone. Many of the traditions of relationship banking that survive from those days are also rapidly disappearing as clients now care most about costs. What it means is that J.P. Morgan is too big at present and has a very un-aerodynamic balance sheet at present.

J.P. Morgan is currently presented in financial comparisons to what are traditionally known as money center banks. Citicorp <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: CCI)") else Response.Write("(NYSE: CCI)") end if %> and Chase Manhattan <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: CMB)") else Response.Write("(NYSE: CMB)") end if %> are often presented as the company's comparables in financial analyses. Judging by the company's strategy and asset composition, though, a more apt comparison would be State Street Corp. <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: STT)") else Response.Write("(NYSE: STT)") end if %>, Bank of New York <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: BK)") else Response.Write("(NYSE: BK)") end if %>, or even Merrill Lynch <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: MER)") else Response.Write("(NYSE: MER)") end if %>. One would think that the second set of companies is the profile that the company is shooting for. For 1997, net loans grew 12.6% to over $30 billion, sucking up vital capital reserves that could be devoted to lighter businesses such as asset management or other fiduciary activities such as its trust business. Not that J.P. Morgan is a lightweight in these areas, as asset management and servicing revenues grew 39% in the fourth quarter. However, it's the trading and commercial banking revenues and net interest income that depresses results for the more attractive areas of the business.

Interest revenue increased 11.8% in the fourth quarter while funding costs rose 15%. A 6% decline in net interest revenue on a nearly 13% increase in net loans outstanding is a good way to mask progress in noninterest revenues. Trading results also masked progress elsewhere in the business. Taking trading revenues out of the noninterest revenues breakdown, noninterest revenues grew 13.6% in the quarter. Adjusting results in the same way for the fiscal year, revenues grew 20%. Leaving trading revenues in the mix, total noninterest revenues grew 3.8% for the year as compared to a 12% growth rate in yearly operating expenses.

The net result of the unpredictability of trading and the top-heavy balance sheet is a return on assets (ROA) of about 0.61% for the year, about half what other big banks make and about one-third the ROA generated by companies such as State Street Corp. Return on equity (ROE), meanwhile, came in under 13%, another disappointing performance considering that the company's leverage is very high. Adjusting for risk, an ROE of under 13% is not a good number and doesn't even live up to return on equity requirements of investors who believe ROE should come in at least between 15% and 20% for a trading-related firm.

The answer is to ditch capital intensive lending activities and decrease the company's reliance on trading, either through a downsizing or through growing the other parts of the business. There is little reason why J.P. Morgan, with its global reach and trade name equity, could not reach the levels of profitability enjoyed by companies like State Street. Should J.P. Morgan choose to shrink assets and kill off its high-cost borrowings, which it must fund through money market operations and not through transaction deposits and lower-rate consumer deposits like other large banks can do, higher returns on equity and assets could be in the offing.

Eventually cutting assets to $175 billion and reducing owners' equity to $12.5 billion in a move to concentrate on money management and other fiduciary activities, the company could target ROA of 1.7% and ROE of 20%. That would put net income in the $2.5 billion to $3.0 billion range. With a 15 multiple on cash flow and earnings, the company could see an addition to market value in the $17.9 billion range, a 12% return per year over the coming five years before dividends and share buybacks. Should J.P. Morgan generate higher returns on the capital it employs, potential returns to shareholders could improve greatly. Now, though, the mixed performance of the company and growth for growth's sake in the commercial lending portion of the business are not doing much to build shareholder wealth. Both demand a clear articulation of the company's strategy for changing its direction.

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Dale Wettlaufer (TMF Ralegh), Fool
Alex Schay (TMF Nexus6), Fool
Yi-Hsin Chang (TMF Puck), Fool
Brian Graney (TMF Panic), Fool
Contributing Writers

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Editor