Bank of America
Bank of America's shares have had a flat return so far this year, trailing the KBW Bank Index's increase of 7%. But during 2012, Bank of America's stock returned 110%, while the index was up 30%. Bank of America's shares still haven't fully recovered from their epic drop of 58% during 2011. The shares are now down 11% since the end of 2010. The stock trades for 0.9 times their reported Dec. 31 tangible book value of $13.36, and for 9.2 times the consensus 2014 earnings estimate of $1.28 a share, among analysts polled by Thomson Reuters. The consensus 2013 EPS estimate is 97 cents. Bank of America was one of the "disappointments" this earnings season, reporting a fourth-quarter profit of just $700 million, or three cents a share. The company had pre-announced a large mortgage putback settlement with Fannie Mae ( FNMA) and a major contribution to the $8.5 billion foreclosure settlement between federal regulators and the nation's largest loan servicers. Then again, Friday's action for the shares reflects how much is at stake for the company in an improving economy. Investors' mortgage repurchase claims against the company rose to $28.3 billion as of Dec. 31 from $25.5 billion the previous quarter. Bank of Americas fourth-quarter presentation implied that the Fannie Mae settlement would reduce the putback claims by roughly $12.2 billion, leaving about $16.1 billion in putback claims. That is still quite a sum, and every new report showing continued improvement in home prices makes investors more comfortable about the company's ability to absorb the punishment.