Lately, I have been fishing and for long-lost treasure. Instead of searching for the planks on pirate ships on the ocean floor, I am searching for beaten up stocks that are out of favor and undervalued by the investment community.

Let me explain why.

For starters, I am naturally a contrarian. For those of you who have never heard that term before, just think of the crotchety old man who disagrees with everybody..about everything. I'm a much younger version of that guy.

The new, flashy companies like Facebook (FB), Alibaba (BABA) or FitBit (FIT) are growth companies. They have plenty of momentum behind them because they are fresh and new. Last year was a great year for growth stocks in general. However, the economy is slowing down globally this year and as the economy slows - fresh and new, become old and stale.

Now is the time of the bologna sandwich.

It's dull.
It's boring.
It's uninteresting.
It's predictable

These sleepy jewels are often overlooked.

Right now, JP Morgan Chase (JPM) is one of those dull, boring and uninteresting companies.

This is literally a sleeping giant.

JP Morgan Chase is the biggest bank on the planet!

It's worth $212 Billion.

It has over $2 Trillion in Assets - YES, THAT SAID TRILLION, with "T".

And...
It generates revenue of over $94 Billion in 2014.  

You could make the argument that it's too big to fail, but that will never be my call.

When I scan for stocks, I was surprised to see it in the results.

But there it was:  

• Undervalued
• Beaten Down Stock Price
• And Paying a Good Dividend

As I am writing this the stock price is down over 11% YTD. This company has been through hell since the 2007-08 financial crisis. Over the last 3 years this company has spent $19 Billion on legal fees due to massive lawsuits and will need to spend  more money on the upcoming legal issues in the upcoming years.

These lawsuits range from

• Mortgage Issues
• Foreign Currency Issues
• Madoff Litigation
• Lehman Brothers
• and several others.

But you can't be the king of the mountain without going through some major battles. The bright side is this company has four main lines of business that are each very successful.

• Consumer & Community Banking - Net Income $9.2 Billion (2014)
• Corporate & Investment Banking - Net Income $6.9 Billion (2014)
• Commercial Banking - Net Income $2.6 Billion (2014)
• Asset Management - Net Income $2.2 Billion (2014)

The Investment Banking unit is expected to grow more than the other units in the future because of the potential business in new markets overseas. The general function of Investment Banking helps Main Street type businesses raise money to expand, so I can see why this could be a great money makers for growing areas abroad especially in areas like Africa, Asia and Latin America.

The Federal Reserve is raising rates, and this is another positive for JP Morgan. Banks typically make more money in higher interest rate environments because they can charge higher interest rates on products they sell to their customers.

These increased revenue opportunities potentially cancel out the lawsuit costs that are a giant money pit for JP Morgan.

The prospects for this company look ripe. Currently the stock is trading at $57. Several analysts have forecast JP Morgan stock to move past $70 in the year (although you have to take analyst predictions with a grain of salt).

That would be a price increase of over 24%. If they are right, that is a great pay day. You could never get that with your money sitting in a CD or savings account at your bank.

Forget about the analysts for a minute. The best positive indicator of success is the recent share purchase by JP Morgan's CEO Jamie Dimon of $26.5 million for 500,000 of the company' shares at $53/share. To be fair, this isn't the first time Mr. Dimon has purchased JP Morgan stock in his tenure as CEO and it is not an absolute signal that the stock will skyrocket higher, but it has clearly moved the needle higher.

The next big event for JP. Morgan is its annual Investor Day which  is coming up on Feb 23rd, 2016. This will give us an even better look at this potential investment.