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Actionable news in BAC: BANK OF AMERICA CORPORATION,

Bank Of America: Buy The Dips

Summary

Bank of America continues to produce solid quarterly results despite weak stock action.

The large bank remains positioned for an eventual rebound in interest rates.

The stock isn't appropriately valued at roughly 1.0x tangible book value of $15.50.

The quarterly results for Bank of America (NYSE:BAC) weren't great, but the stock offers considerable appeal due to the valuation metrics. The large financial institution saw solid loan growth while managing expenses, but BAC couldn't overcome the weak interest rate environment.

After the disappointing numbers from JPMorgan Chase (NYSE:JPM), the market was pleasantly surprised when BAC solidly beat estimates. In all fairness, the analyst community had cut expectations from $0.36 down to $0.33 in the months prior to the quarterly report. The bank actually beat the original estimate confirming the pessimism on BAC despite a steady profit profile.

The stock is down roughly 15% from the July high, yet BAC is only up fractionally in mid-day trading. The market is still looking for some of the growth that the bank can't deliver in the current economic...


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