Ups and Downs of Bank of America Corp (NYSE:BAC)


Dallas, Texas 07/03/2013 (Financialstrend) – Bank of America Corp (NYSE:BAC) shares are currently trading at $12.79, down by 0.85%. The intra-day range of the stock is $12.73 – $12.82. The market capitalization of the company is $138.04 billion.

Bank of America Corporation is still a victim of the 2008 financial crisis in spite of the fact that its multi-year run is very high. In terms of assets, it is one of the top 5 banks of United States.  However, after Citigroup, it has the worst equity performance over the past five years. During this time, it has dropped by around 48% compared to Citigroup (which has plummeted 72 percent)and Goldman Sachs (which has plummeted 13 percent). On the contrary, since mid-2008, J.P. Morgan has gained 51 percent and Wells Fargo isup 72 percent.

On a price to book basis, the shares of Bank of America Corporation are undervalued in comparison to its major competitors. The book value per share of Bank of America is $20.19 and in order to reach a price/book of 1, it will have to rise by 57 percent.

The business of Bank of America Corporation is getting better. During the last year, the company has increased its savings and has cut its non-performing loans to position itself better. The capital of the company has surged up, contributing to a growth in its book value.

It has over $1 trillion in deposits, which provide a robust base for profit and revenue growth.

It is true that the company is doing a decent work to come back from the financial crisis of 2008, but it is still not able to move past the blunder it had made through the acquisition of Countrywide Financial. Chief Risk Officer of BofA, Terrence Laughlin, noted that unless the company’s settlement of $8.5 billion with mortgage investors is approved, Countrywide Financial will be pushed into bankruptcy.

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