This Day On The Street
Continue to site right-arrow
ADVERTISEMENT
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
Stocks Under $10 with 50-100% upside potential - 14 days FREE!

Bank of America: Financial Winner

Stocks in this article: BAC C I:BKX

NEW YORK ( TheStreet) -- Bank of America (BAC) was the winner among the largest U.S. financial names on Tuesday, with shares rising over 1% to close at $9.91.

The broad indexes ended with slight declines, after President Obama rejected the counterproposal to his initial compromise plan that was presented by Treasury Secretary Timothy Geithner to Speaker of the House John Boehner (R-Ohio) last week. The Republican leadership of the House of Representatives is looking for larger spending cuts than the president has agreed to so far, while President Obama is insisting on tax rate increases for couples earning over $250,000 per year.

The Republican leadership in Congress would prefer to see federal revenue increase through caps on tax deductions and the closing of tax loopholes. The president's proposal also included a $50 billion economic stimulus package.

The KBW Bank Index (I:BKX) was down 1% to close at 47.84, with all 24 index components down for the session, except for Bank of America and Citigroup (C), which was up seven cents to close at $34.29.

Bank of America's shares have now returned 79% year-to-date, following a 58% decline during 2011. To put those two figures into perspective, the shares are down 25% since the end of 2010.

The shares trade for 0.7 times their reported Sept. 30 tangible book value of $13.48, and for 10.2 times the consensus 2013 earnings estimate of 97 cents a share, among analysts polled by Thomson Reuters. The consensus 2014 EPS estimate is $1.28.

The Wall Street Journal on Sunday reported that Bank of America had decided not to go ahead with a plan to begin charging monthly fees to at least 10 million checking account customers at the end of the year. With some of the company's largest competitors also planning new checking account fees, it would appear that Bank of America could finally be ahead of the trend and avoid a new set of nasty headlines.

While bank of America's shares are discounted to tangible book value in a way similar to Citigroup, the shares look much more expensive on a forward P/E basis when compared to Citi, which was trades for 7.4 times the consensus estimate of $4.64.

1 of 2

Select the service that is right for you!

COMPARE ALL SERVICES
Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!

Markets

DOW 17,804.80 +26.65 0.15%
S&P 500 2,070.65 +9.42 0.46%
NASDAQ 4,765.38 +16.9840 0.36%

Brokerage Partners

Rates from Bankrate.com

  • Mortgage
  • Credit Cards
  • Auto

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs