Bank of America (BAC)

(A Top Pick Feb 16/12. Up 50.17%.)

This bank was hit quite hard in the 2008 financial crisis. Slowly getting their problems resolved. Loan losses are declining. This is a play on the whole US general economy. Her preference in the US would be J.P. Morgan (JPM-N).

(Market Call Minute.) People are crazy about banks again but he doesn’t think they really know what they do. In this environment, start taking money off the table.

If they manage their business well, the economy cooperates, housing comes back and the lending squeeze loosens a little bit, this bank has big opportunities. Last year it bounced off a very oversold situation and a lot of that is built-in. Prefers more senior lenders such as J.P. Morgan (JPM-N).

Was the top performing bank stock last year. Sold his holdings, but thinks there is more upside. Wouldn’t be surprised if the US bank stocks marked a little time here. This is a better way now to play the housing recovery rather than the homebuilders which everybody has been playing. He would buy it back at around $10.

A way for him to get exposure to the US housing recovery. Tangible book is $14-$15 by year end. Fed could allow them to pay regular dividends soon. Surprises are probably to the upside. Have about 10% of the deposits of the US consumer.

Constructive on the US financials but this one has a little too much risk for him. He would put a little of his own portfolio in it though. C-N and BAC-N are still risky. He prefers the investment bank area.

Has good support. Will be volatile, resistance shortly. He doesn’t worry about daily movements. If it gets through the $12 range it could spike up to $15.

Just reported earnings which were marginally profitable. Good management and is settling a lot of legacy issues. Can see this being a $30 stock again.

Likes the US banking sector. On this, forward earnings are quite up there. In general he expects the stock will continue to move up but for better valuations he would look at a Goldman Sachs (GS-N) or J.P. Morgan (JPM-N).

There are hopes that they will be able to raise their dividends but first they have to pass certain regulatory hurdles. All of the banks are becoming better and better capitalized. This bank still has some headwinds. He would look for a more senior bank such as J.P. Morgan (JPM-N) or even a Wells Fargo (WFC-N).

Technically the markets are ok for another 3-4 weeks, then cliff issues. The banks will get hit at that point. All the banks are very over bought. There was strong resistance at $10 which we have broken through. You want to buy this on dips. There is a potential for a correction over the next month or two. If you get close to breakeven, take some off the table so you can get back in on a dip. If you are a long term investor, then $15 is doable if all the right things come into play this year.

Financials have a period of strength from January to April. This is no different. Outperforming market and above significant averages. But it is overbought and due for an average. Get in at $11.17

US banking is a great story. They are in the sweet spot. Housing market is turning around. All the loans they have made since 2009 are in fantastic shape on their books. They are not going to have loan losses. Cutting their cost structure down and are trading at much lower multiples than they were years ago. Try to get it on a pull back.

It got to the point where it was oversold and he is not sure if that is all it is or is it fundamentals also. We are still faced with the fact there is low loan demand and a flat yield curve. Trading at 65-70% of book value. They have more responsible management now. He would prefer to go up the ladder and look at JP Morgan or Wells Fargo.