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How do you figure it is a $20 stock? So what it pays a dividend. If the guy loses 20-50% his dividend is irrelevant.
This stock looks horrible from a fundamental and technical perspective. Not to mention from a "socially responsible" angle this bank helped ruin the economy with its overzealous lending practices along with many other TBTF banks.
If you make a statement it is going to $20 you have to back it up with some info because right now the trend is NOT its friend.
I cannot post all the info I use because it is proprietary. But, here are a couple of thoughts.
Book value per share $21.97. That means that it is currently trading at a significant discount to its book value. It is a value play.
Then, if you look at what the analysts are saying, out of 32, only one is calling for an underperform. Thirteen are calling it a hold and fourteen a buy. To quote CNNfn:
"The 25 analysts offering 12-month price forecasts for Bank of America Corp have a median target of 18.00, with a high estimate of 24.00 and a low estimate of 13.00. The median estimate represents a +26.67% increase from the last price of 14.21. "
I cannot post all the info I use because it is proprietary. But, here are a couple of thoughts.
Book value per share $21.97. That means that it is currently trading at a significant discount to its book value. It is a value play.
Then, if you look at what the analysts are saying, out of 32, only one is calling for an underperform. Thirteen are calling it a hold and fourteen a buy. To quote CNNfn:
"The 25 analysts offering 12-month price forecasts for Bank of America Corp have a median target of 18.00, with a high estimate of 24.00 and a low estimate of 13.00. The median estimate represents a +26.67% increase from the last price of 14.21. "
So, in my view, there is much more opportunity for upside than there is for downside here.
I am not interested in the social angle. This is about making money.
Since when do analysts who work for all the TBTF or other Wall St. firms offer any credibility??? Listening to analysts is a poor strategy. This has been proven countless times in the market (Ie. Enron, Citigroup, Bear Stearns, etc.) See Proof
BAC was a value play at $2.50 not now IMO. Of course BAC would have been toast if not for a taxpayer bailout.
Book value is irrelevant when the bank is cooking their books. What would book value be if they marked their assets to market? BAC like all the other TBTF banks is nothing more than a Ponzi propped up by Ponzi financing via the Fed and Government. The only thing BAC has going for it is it is a TBTF and the government will have to continue to prop it up via QE. BAC is in big trouble if the Zero Interest Rate Policy (ZIRP) falls apart. Most of their current profits probably come from a carry trade when they can borrow at 0%. They also are sitting on billions of real estate that depreciates by the day.
The main analyst I listen to is supply and demand. Supply and demand idoes not have a conflict of interest like many of these analysts (Many of whom work for firms that are market makers for BAC).
At the end of the day the risk is much higher on BAC to rely on a bunch of analysts looking at "cooked" financials on a company artificially propped up and hoping it goes to $20 vs. the investor minimizing his risk and taking a loss based on original investment.
Who knows you might end up being right since miracles can happen but the odds are not in your favor.
Since when do analysts who work for all the TBTF or other Wall St. firms offer any credibility??? Listening to analysts is a poor strategy. This has been proven countless times in the market (Ie. Enron, Citigroup, Bear Stearns, etc.) See Proof
BAC was a value play at $2.50 not now IMO. Of course BAC would have been toast if not for a taxpayer bailout.
Book value is irrelevant when the bank is cooking their books. What would book value be if they marked their assets to market? BAC like all the other TBTF banks is nothing more than a Ponzi propped up by Ponzi financing via the Fed and Government. The only thing BAC has going for it is it is a TBTF and the government will have to continue to prop it up via QE. BAC is in big trouble if the Zero Interest Rate Policy (ZIRP) falls apart. Most of their current profits probably come from a carry trade when they can borrow at 0%. They also are sitting on billions of real estate that depreciates by the day.
The main analyst I listen to is supply and demand. Supply and demand idoes not have a conflict of interest like many of these analysts (Many of whom work for firms that are market makers for BAC).
At the end of the day the risk is much higher on BAC to rely on a bunch of analysts looking at "cooked" financials on a company artificially propped up and hoping it goes to $20 vs. the investor minimizing his risk and taking a loss based on original investment.
Who knows you might end up being right since miracles can happen but the odds are not in your favor.
Well, we will just have to agree to disagree. I am perfectly comfortable with my investment strategy. In my view, both BAC and C remain undervalued and I think the market will move to correct that over the next couple of years.
Sorry bro, but BAC's got a lot of things going against it. Like it says at Royalty Trades: Stock of the Day: Bank of America, the big ones are that BAC missed their earnings estimates by a lot, and insiders are selling off shares. When the bosses don't have faith in the company, why should you?
I'm not saying it won't ever get back up to $16, especially in this environment where people are buying up dips like there's no tomorrow. I just think the opportunity cost of holding it and waiting is too high.
Sorry bro, but BAC's got a lot of things going against it. Like it says at Royalty Trades: Stock of the Day: Bank of America, the big ones are that BAC missed their earnings estimates by a lot, and insiders are selling off shares. When the bosses don't have faith in the company, why should you?
I'm not saying it won't ever get back up to $16, especially in this environment where people are buying up dips like there's no tomorrow. I just think the opportunity cost of holding it and waiting is too high.
Don't know where Royalty Trades gets their info but I would have been more impressed if they had provided some evidence.
I don't see anything in BAC which would push me to sell and take a loss which was the OPs question. But I do see upside potential if he/she is wiling to be patient.
Maybe I'm misreading that chart, but insiders were selling in January, not buying.
I also said there was upside potential, especially given the current market climate. But the OP has to weigh the opportunity cost of holding BAC, when he could be holding something like TSO or INTT.
I agree with Jaggy - the big banks are ALL undervalued right now. I am long on both BAC and JPM, and I am up on both, a little on BAC and significantly on JPM. As bank earnings start to stabilize over the next year or so, and as the housing market begins to firm up, the share prices in these banks should begin to rise, and I think we can also reasonably expect a pop when they being to announce restored dividends. As Jaggy said, I am also very comfortable holding these shares and adding small amounts on the dips. Who knows, if C dips any lower, I may just grab some of that, too.
so here's my scenario have about 1000 shares of BAC, averaged in @16.15. Been holding since last summer. Now it's dropped again, down to below 14. I've been doing endless research and now just want to break even and get out.
Thoughts if that's going to happen? I am usually pretty good at this but this bank seems to consistently buck the trend. It did have a nice run up the last few months to 15, but seems like now market goes up, it stays flat, market drops, it drops more.
I'm out of banks. I just can't get my head around their direction. They are making more money, but they can't do what they did in the past. However, they have, historically, been able to find ways to make more money. Yet, I think we are far off from them hitting their '05-'06 numbers. My rule is, if I don't think I have a good grasp on the direction and business model then I just stay out.
case in point market up nicely today, BAC is flat, oops just went RED!!!!!
I think I know the answer to my question. Next little bump up I am out, take my loss, lick my wounds and move on. Never again to look at this one.
And if you had some courage, you'd have bought some puts last week
Ask yourself, do I lose money or do I improvise??
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