Bank of America (BAC) Buy, Sell or Hold

Bank of America (BAC)

50.56

-0.52 (1.02%)

as of Oct 23, 2026, 8:00:00 pm Market Closed.

708 watching

DON'T BUY

Earnings are pretty good – beat the street. Trading revenues are poor. Market didn’t like the quality of earnings. They released reserves, increasing earnings. If the bank is more comfortable, that is a good sign for earnings going forward. Balance sheet is atrocious. Prefers Canadian banks.

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COMMENT

Stock is in a trading range. Wouldn't want it to go below the previous low of $13.50 of a few days ago. If you own, start reducing it goes below $13.50.

BUY

On a normalized basis, the stock has $2.50-$3 in it. Depending on what happens to the Financial Regulation bill that is now in front of Congress there could be a $.50 hit. Merrill Lynch and Countrywide are two very valuable franchises.

DON'T BUY

Just told US regulators that in April it unintentionally hid nearly $11 billion in debt from its balance sheets using 6 trades known as “dollar rolls” between 2007-2009.

PAST TOP PICK

(A Top Pick May 28/09. Up 33.2%.) Great investment bank and great international banking. Has 10% of all deposits in the US. Great credit card business.

DON'T BUY

Has a small position and has been writing options on this. Pulled back with risks of regulatory reforms and capital requirements changing in the industry. Would prefer others in the US banking sector such as Morgan Stanley (MS-N)

PAST TOP PICK

(A Top Pick May 28/09. Up 45%.) Have a lot of great assets. Merrill Lynch will work out for them but will take a bit of time. Think they can make $4-$5 a share over the next 4-5 years. If it trades at 10X earnings, it is a $40-$50 stock.

BUY

Financial regulation process that is going on creates an unknown that the market doesn't like. Also the Justice Department and SEC are looking at banks. Trading at about 70% of BV, well below historical levels. Great franchises including Merrill Lynch and Countrywide, which will prove to be valuable over time. Long-term hold.

DON'T BUY

Canadian banks are far better quality. If you want to be involved in the US banking sector, this one is okay but he would prefer JP Morgan (JPM-N) or US BanCorp (USB-N), which are higher quality. If the market weakens, financials are going to leave it down so wait.

PAST TOP PICK

(A Top Pick May 28/09. Up 64.1%.) Merrill Lynch and Countrywide are going to work out for them. Growth potential in earnings is pretty high. Dividend is going to come back.

BUY

Paid off government money, replaced their CEO and are trading at 70% of Book, which is very cheap. As the economy starts to repair itself, they have 2 fabulous franchises, Countrywide and Merrill Lynch. Expects normalized earnings to be $2.50-$3 range, which would almost double the stock price.

COMMENT

One of the cheaper US financial stocks. They have the earning power and can make a lot more money than they do today. The downside is that Merrill Lynch and Countrywide, which they acquired, have their own problems. A lawsuit with Goldman Sachs could have an impact on Merrill Lynch. Countrywide’s subprime mortgages are still being investigated.

BUY

Reporting on Fridays so it will be an interesting one. Trading at a big discount to BV. Great earnings power. Dilution because of the equity they had to issue. (See Top Picks.)

DON'T BUY

(Market Call Minute.) Still a work in progress. Speculative.

COMMENT

New management seems to be somewhat more conservative and more bottom line shareholder oriented. For a long-term investor, this US Bank will be one of the survivors. You might consider buying on a pullback.

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Bank of America (BAC)