Bank of America (BAC)

They have a combination that works, including capital markets and wealth management. Should deliver a good report.

Not expensive, trades below book. Nice dividend yield. Very strong wealth management and investment banking. One of the best retail franchises. Well capitalized to increase dividend or buy back shares. Commercial real estate remains a question for all banks, but mainly the regional ones. Though if one segment of banking falls, they all do.

Still likes it. Has a global presence. Is not vulnerable to deposit flight. US financials rank #3 or 4 among the 11 sectors this year at 10% total return. Is trending upwards since last October. Pays a 2.6% dividend and trades at 1x price-to-book. The economy is firm, not in recession.

Performance of bank steadily increasing as interest rate fears decrease. Loan loss provisions not a concern. Net interest income steady. Good name to own for the long term. Will continue to own. 

Trades at 10x PE and yields nearly 3%. Great CEO. Will rise over time.

Yields rose this week but he was encouraged to see BOA trade well, unlike falling as it usually does when the 10-year climbs. The negativity over the regional banks has been flushed out, which benefits BOA. He also own JPM, which is setting highs, but expects BOA to catch up and outperform JPM.

BAC trades at a high 1.4x book value, but at low 10x PE. It's a show-me story that needs to release a few solid quarters in a row. But it offers an excellent digital banking platform and attractive dividend, but is unloved.

Is flat on the year, despite this rally. Trades at 1x book. Net interest income and expenses for the quarter are in line. Expects the results of their fees to be mixed, but expects more cost cuts as it waits for fees to rise.

Sold it in October after many years. Merill Lynch is their crown jewel, but can't exploit it like MS can milk their wealth management business.

Likes the money centre banks. Will do well with a normalized yield curve, as it enhances net interest margins. Fed signalling interest rates coming down should depress the short end of the curve, with the long end maintaining itself somewhat.

The group is trading at about a 30% discount to normalized valuations of around 13.5x earnings. That carries through to book value, trading at discounts to historical norms. He owns JPM, BAC, and MS, and that's where he'd put money.

Focused on retail banking, which is the most conservative. Good source of deposit funding. Bonds on balance sheet impair capital, but this is short term and doesn't imperil fundamental operations. Positive. CEO is solid.

They see consumer spending growth petering out, but still 4% higher YOY, but this is a return to normalcy.

Still owns it. BAC earnings beat recently. Fixed income and capital markets are still growing. Is trading below book value and pays a 3.5% dividend yield. During Covid, they invested in mortgage-backed securities, and they're now under water by $130 billion because rates are going up. That's an overhang that will continue until rates stabilize. But this isn't a risky regional bank, but diversified with strong segments.

Reporting top- and bottom-line beats today

He had sold the banks (MS, BAC, but is long JPM) to buy QQQs, and he stands by that rotation. If any banks decline, it would be the regionals, which he's avoided since the spring crisis. His outlook on the banks is limited, given regulations restricting hoarding capital on the balance sheet, which will impede loan growth. Plus, the economy will start to contract. MS and BAC are good companies, but he'd rather buy the debt of these stocks, because their balance sheets will be fortified.

A good bank. Never hurts to take profits. If you sell this, don't buy a Canadian bank, but another American bank to avoid the 30-day waiting rule.