The Zacks Analyst Blog Highlights: Apple, JPMorgan Chase, Goldman Sachs Group, Morgan Stanley and BankUnited

Aug 30, 2013, 09:30 ET from Zacks Investment Research, Inc.

CHICAGO, Aug. 30, 2013 /PRNewswire/ -- announces the list of stocks featured in the Analyst Blog. Every day the Zacks Equity Research analysts discuss the latest news and events impacting stocks and the financial markets. Stocks recently featured in the blog include the Apple Inc. (Nasdaq: AAPL-Free Report), JPMorgan Chase & Co. (NYSE: JPM-Free Report), The Goldman Sachs Group, Inc. (NYSE: GS-Free Report), Morgan Stanley (NYSE: MS-Free Report) and BankUnited, Inc. (NYSE: BKU-Free Report).


Today, Zacks is promoting its ''Buy'' stock recommendations. Get #1Stock of the Day pick for free.

Here are highlights from Thursday's Analyst Blog:

Apple to Buy Swedish Software Company

Apple Inc. (Nasdaq: AAPL-Free Report) is on an acquisition spree. The iPhone maker recently acquired Swedish software and data performance startup company AlgoTrim. The current deal follows the back-to-back acquisitions of mapping company, Embark (Aug 2013), and Locationary (Jul 2013). These were preceded by the takeover of WiFiSLAM earlier this year.

AlgoTrim's technology can be used to make files smaller, which helps in improving the performance of a computer. AlgoTrim specializes in data compression, mobile imaging and video and computer graphics.

This type of software primarily helps to improve performance of mobile devices by reducing the amount of memory used. It also reduces the computational effort required for various files when they are stored and accessed.

These acquisitions indicate that the company is acquiring smaller companies to get hold of new technologies. Also, Apple's strategy of acquiring start-up technology companies is prudent considering the fact that the total acquisition cost is much lower. Moreover, Apple targets companies which can be easily integrated into its current product portfolio.

These acquisitions also enable Apple to deliver tailor-made solutions and technological know-how for specific problems. We believe that this acquisition policy will benefit Apple in the long run.

Probe of JPMorgan's Hiring Intensifies

The legal probe on JPMorgan Chase & Co.'s (NYSE: JPM-Free Report) hiring practices now extends beyond Hong Kong to countries across Asia, involving more than 200 interns and full-time staff. The initial investigation revealed internal spreadsheets depicting job offers connected with business deals.  

The probe began this May with JPMorgan hiring the offspring of influential Chinese government officials. Allegedly, the bank lured people with jobs, and in return, the newly recruited employees had to boost business by exploiting their government contacts and records.

The aforementioned hiring practice breaches the US Foreign Corrupt Practices Act and if the charge is proven, JPMorgan's business in Asia is likely to suffer. The investigation adds to the legal hassles that are already afflicting the bank.

Further, the probe strengthened with the U.S. Justice Department joining the Securities and Exchange Commission in the scrutiny. On the other hand, a Hong Kong-based JPMorgan spokesperson Marie Cheung affirmed the bank's cooperation with regulatory bodies during the probe in all possible ways.

Asia, comprising emerging economies, is a lucrative domain for profit-seeking organizations. Major banks in the U.S. are eyeing the region in an attempt to strengthen their foothold in the fastest growing markets. So JPMorgan is no exception.

In a rush to fare better than its peers, the company may have adopted unfair means to expand its business. While it is not a crime to appoint officials with influence, creating perfunctory positions for bolstering the business is illegal. Further progress in the probe alone will reveal as to whether JPMorgan recruited personnel judging their qualifications or not.

In the past, there have been instances in which large banking institutions have indulged in similar malpractices. The Goldman Sachs Group, Inc. (NYSE: GS-Free Report) had once hired the former Chinese president Jiang Zemin for its private investment arm.

Moreover, in 2012, a former Morgan Stanley (NYSE: MS-Free Report) adviser was imprisoned on accusations of bribing a Chinese official to procure profitable real estate investments for the bank.

JPMorgan currently holds a Zacks Rank #3 (Hold). A better performing bank is BankUnited, Inc. (NYSE: BKU-Free Report), which has a Zacks Rank #1 (Strong Buy).

Today, Zacks is promoting its ''Buy'' stock recommendations. Get #1Stock of the Day pick for free.

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