The banking sector, both in the United States and abroad, was thrown into chaos in 2008, and has never really emerged. Of course, some were less damaged and more able to recover than others. I will look at five large cap banks looking for values.
Bank of America Corporation (BAC) is listed on the NYSE, and its stock was recently trading at a little under $7 per share, near the low end of its 52 week range of from $15.31 to $5.13. It has a market capitalization of about $70 billion. It has no trailing P/E ratio due to its large losses in 2010. It pays an annual dividend of $0.04 for an annual yield of 0.60%
Bank of America is the nation’s largest bank by assets, and it recently released its third quarter report. BofA surprised many analysts by posting profits of $6.2 billion. The quality of those profits is another matter. Its loan loss reserves declined by $2.0 billion from the year earlier. It recouped nearly $1.7 billion from recapturing already spent loss reserves. It credited itself another $1.7 billion by revaluing its debt. It also recorded a substantial gain on the sale of equity in a Chinese bank. It actually lost money from continuing operations..
BofA still is struggling under the weight of faulty mortgages it acquired due to its purchase of Countrywide Financial. It has lost tens of billions due to soured mortgages from that portfolio, and the end is not in sight. To continue reading, click here