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BANK OF AMERICABANK OF AMERICABANK OF AMERICA

BANK OF AMERICA

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4BAC trade ideas

Fundamental Friday - BACFundamental Friday (BAC): Gallacher's Fundamentals: 1. Select historically "Cheap" or "expensive" markets. - BAC is within uncertainty range level 1. - Financial sector is cheap, relative to tech. BAC has an 18.19 PE ratio vs 585 PE ratio of TSLA. - BAC is neither cheap nor expensive relative to rivals in the financial sector (JPM, GS, by RSI). 2. Develop a critical eye for what is "important" fundamental information to a particular market. - Important fundamental information in the financial sector is the longer-term Treasury yields, which I expect to rise this year. Long inflation. - Macro trend in Quad 2, excess capital generated will be used to buy back shares. Get (1) neutral, (2) bullish, or (3) bearish: - Bullish Some Warren Buffett Tenets: Is management rational? - BAC’s Brian Moynihan expects the bank will increase its dividend and boost its share buybacks once its passes its Fed stress tests. Last month, it announced a $25Bn share buyback plan with its excess cash. Focus on return on equity, not earnings per share. - ROE on a rising trend, 7.58% from 6.14% last quarter. Calculate “owner earnings.” - Owner Earnings = Net Income + Depreciation, Amortization +/- Other Non-cash charges - Full Capex +/- Changes in Working Capital (Assets – Liabilities or Shareholders Equity) - 17.1B + 2B – 6.2M + 16.2B = 34.7B/8.7B = $3.99 owner earnings per share. - Price to owner earnings: Current price = 42.36/3.99 = 10.62, vs. 18.19 PE Ratio (TTM), this is undervalued in the short-mid term. Look for companies with consistent and high profit margins. - Profit margin of 0.18 vs 0.1396 historical average (increasing trend). GLHF - DPT
NYSE:BACLong
by UnknownUnicorn1043646
2
Buffett, a share buyback and over reserved - roll the putsI sell and roll a BAC put vertical monthly. This has been a very good strategy for the options trader. The company has a large share buy back in place. Berkshire Hathaway has been given permission to expand to 15% of the common stock. The company is over reserved and likely with earning tomorrow will report the actual amount of reserves released to the bottom line as earnings. I sell cash secured put verticals on the stock and routinely roll these forward. Likely the day after tomorrow I will be able to buy in the 40/37 strike put vertical and sell the next months options keeping some cash and rolling the risk forward by one month. As usual the cash goes into GGN or BPT. One is an oil and gas portfolio. The other is an oil trust. I like my chances.
NYSE:BACLong
by Spotshooter1983
Bank of America BAC Bearish CrabBank of America (BAC)... this company is found in Warren Buffet's Portfolio and once it becomes a bargin price it will be found in mine too. I follow the advice layed out by The Oracle of Omaha. The company financials are very weak from a value investors point of view. The total revenue has been flat line at best for the past decade and when your operating income eats up 74% of your total revenue thats a problem. I always try to remember the law of depreciating return which is "you get back less than you put in." Warren Buffet always says "its easier to take 100,000 to a million than to take a billion to 100 billion. I mean the company is absoultly massive with 2 Trillion dollars in assets?!?! So, I guess the Value invstor needs to look at other things when considering Bank of America. I dont forget that major banks created these mortgage bonds back in 2008 that imploded when the real estate market crashed, so i have to dig deeper into where the assets are coming from. However their EPS has been growing at a decent rate over the past decade so thats also a plus. Their total ratio (becasue they do not report current assets and curret liabilities) is a 1.14 which if using a a current ratio thats real good (not exceptional but better than just plain "good") They are currently undervalued by the Ben Graham Formula (revised) by 61%. Which is a real good thing as well. They pay an annual dividend of 1.75%, but i am not sure if theyre an S&P aristocrat or not. Overall, based on what i have read based on Marry Buffets books and listening to videos of Warren Buffet himself i would grade BAC ( Bank of America Corp.) a C+ company which I would hold only for a few years up to 5 years max. Dont get me wrong the company is NOT going anywhere, so if youre looking to hold just to hold to sound trendy and chic amongst your friends then sure, but it is not going to be your star player, but more like your practice squad ...just a great supplemental. the technical side is the Bearish Crab. the grey box is the PRZ with a 3.618 projection of the BC leg, a 1.618 of the XA leg and 2.0 fibo extension of the ABC legs. if youre looking for a decent bargain then wait for Price to reach the pink line which is .382 of the whole pattern and if youre looking for a great bragain then wait for the .618 of the entire pattern. Seeing how the market is flowing at the moment i would probably buy at the .382 of the retrace anything lower than that there might be mass hysteria of a market "crash" which is honestly a very much needed correction for the stock market. But a good deal is better than no deal. I dont publish often my investing ideas as my investing is vastly different than my speculation ideas. If you guys want to know more about my investing ideas please let me know in the comments. I know value investing is not as flashy as speculating, but the longevity of investors is far greater than that of any speculator; moreover, it is of dire importance to know the difference of speculation and investing.
NYSE:BACShort
by ARegularGuy