TheStreet Ratings quantitative stock model has maintained a Buy recommendation on Bank of America Corp (BAC) - Get Bank of America Corporation Report since May 10, 2016. Over that 26-month period, the stock value has doubled, accruing gains of 112% that continued with its second-quarter earnings beat on Monday.
If you prefer exchange-traded funds to holding individual stocks, you may want to consider funds with a large percentage of holdings concentrated in Bank of America stock. The four of the five funds with the highest percentage of their assets in JPMorgan Chase are Buy rated: iShares US Financial Services ETF (IYG) - Get iShares U.S. Financial Services ETF Report B+ with 9.0% of assets, Financial Select Sector SPDR (XLF) - Get Financial Select Sector SPDR Report B- with 8.4%, Vanguard Financials ETF (VFH) - Get Vanguard Financials ETF Report B+ with 7.2%, and Fidelity MSCI Financials Index ETF (FNCL) - Get Fidelity MSCI Financials Index ETF Report A with 6.9%.
Recently, TheStreet Ratings objectively rated this stock according to its "risk-adjusted" total return prospect over a 12-month investment horizon. Not based on the news in any given day, the rating may differ from Jim Cramer's view or that of this articles's author. TheStreet Ratings has this to say about the recommendation:
We rate BANK OF AMERICA CORP as a Buy with a ratings score of B. This is driven by a few notable strengths, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. The company's strengths can be seen in multiple areas, such as its growth in earnings per share, increase in net income, revenue growth, good cash flow from operations and solid stock price performance. Although the company may harbor some minor weaknesses, we feel they are unlikely to have a significant impact on results.
Highlights from the analysis by TheStreet Ratings goes as follows:
- BANK OF AMERICA CORP has improved earnings per share by 37.8% in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past two years. We feel that this trend should continue. During the past fiscal year, BANK OF AMERICA CORP increased its bottom line by earning $1.55 versus $1.49 in the prior year. This year, the market expects an improvement in earnings ($2.49 versus $1.55).
- The net income growth from the same quarter one year ago has exceeded that of the S&P 500 and the Commercial Banks industry average. The net income increased by 29.6% when compared to the same quarter one year prior, rising from $5,337.00 million to $6,918.00 million.
- Despite its growing revenue, the company underperformed as compared with the industry average of 11.7%. Since the same quarter one year prior, revenues slightly increased by 8.9%. Growth in the company's revenue appears to have helped boost the earnings per share.
- Net operating cash flow has significantly increased by 414.13% to $40,354.00 million when compared to the same quarter last year. In addition, BANK OF AMERICA CORP has also vastly surpassed the industry average cash flow growth rate of -79.29%.
- Compared to where it was a year ago today, the stock is now trading at a higher level, reflecting both the market's overall trend during that period and the fact that the company's earnings growth has been robust. The stock's price rise over the last year has driven it to a level which is somewhat expensive compared to the rest of its industry. We feel, however, that other strengths this company displays justify these higher price levels.
- You can view the full analysis from the report here: BAC
-- Reported by Kevin Baker in Palm Beach Gardens, FL
Disclosure: Editor's Note: Any reference to TheStreet Ratings and its underlying recommendation does not reflect the opinion of Jim Cramer, TheStreet, Inc. or any of its contributors.