Bank of America Rally Just Starting: Poll

NEW YORK ( TheStreet) -- Bank of America ( BAC) has been among the top -performing bank stocks in 2012, with shares up 46% year to date.

There is cause to worry of the rally is overdone, considering that the market seems to be bidding up last year's underperformers such as Citigroup ( C), up 28% and Regions Financial ( RF), up 36%, while stocks of healthy banks such as JPMorgan Chase ( JPM) have trailed behind with a return of 19%.

But Bank of America's stock might have more steam left, according to readers of TheStreet and some analysts.

In a poll run by TheStreet last week on whether it was time to cash out of Bank of America's rally, more than 60% or 344 of the voters said they would not sell the stock because the "rally is just getting started."

Only 21% or 118 readers thought the stock's rally was overdone. About 15% of the voters or 85 voters thought that the stock was a trader's delight, meaning they could just hop in and out of the stock depending upon sentiment.

Indeed the extreme investor apathy that dogged the stock in 2011, when it crashed nearly 60%, seems to have reversed in the early months of 2012.

Investors appear convinced that the bank has successfully addressed its capital adequacy issue. While some analysts question the ability of the bank to generate earnings as it shrinks its balance sheet, the market, at least for now, seems more optimistic for now.

With the stock continuing to trade at a discount to its book even after the rally, analysts are also reluctant to call the top for Bank of America.

The bank has also had more good news than bad news in recent weeks. The $26-billion nationwide foreclosure settlement between the biggest banks and the states has helped resolve one piece of the mortgage puzzle, although banks still remain exposed to mortgage liabilities.

Bank of America also scored a small victory after a U.S. appeals court ruled that a proposed $8.5 billion mortgage-backed securities settlement should be reviewed in a New York court and not a federal court, increasing the chances that it will be approved.>

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