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Activist Watchlist: Bank Of America


With too big to fail Morgan Stanley getting an activist, who’s next?

BAC is the likely candidate given its gross underperformance.

However, there’s an Omaha sized hurdle.

As I noted earlier this week, Morgan Stanley (NYSE:MS) getting targeted by ValueAct Capital could open up the floodgates when it comes to activist investing and big Wall Street banks. And recall, there are only a few bigger banks that have managed to attract an activist. Comerica (NYSE:CMA) is one of note, while Bank of New York Mellon (NYSE:BK) is one as well.

But still with ValueAct at MS, that now leaves one of the biggest banks in the cross hairs, Bank of America (NYSE:BAC). BAC has been a relative underperformer and its returns on capital have been sub par. Despite being a massive $160 billion market cap, there are a handful of activists that could muster up the capital to take on the giant - including Nelson Peltz's Trian Partners.

Banks, the biggest ones anyway, have done well to avoid the guise of activists. BK is the most notable name to face an activist - seeing pressure from the likes of Marcato Capital and Trian Partners. However, Trian has been willing that battle, which includes keeping the bank together and management in place.

But at BAC, the value...