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This week, I’m adding $BAC to my 2021 Best “PH”List at $26.30 (PH is permanent hold).
Last week I started the list with $LSXMK which was up this week. That’s great, but I don’t care - these are stocks I’m holding through at least 2021.
Here’s why I like $BAC :
Last week I started the list with $LSXMK which was up this week. That’s great, but I don’t care - these are stocks I’m holding through at least 2021.
Here’s why I like $BAC :
Current summary of the “Big 4”
$JPM is the best bank extant, and it’s not even close. It’s also priced that way. I like $JPM but like $BAC more.
$WFC is cheap but can’t seem to make any money until after the government leaves them alone (yes, a potential catalyst).
$JPM is the best bank extant, and it’s not even close. It’s also priced that way. I like $JPM but like $BAC more.
$WFC is cheap but can’t seem to make any money until after the government leaves them alone (yes, a potential catalyst).
That leaves:
$C is as cheap as $WFC and is the most internationally diversified (good and bad IMO). I like $C a lot (it may find it’s own place on this list in the future).
$BAC is today’s pick. Why?
It’s an inexpensive, well run, profitable bank.
$C is as cheap as $WFC and is the most internationally diversified (good and bad IMO). I like $C a lot (it may find it’s own place on this list in the future).
$BAC is today’s pick. Why?
It’s an inexpensive, well run, profitable bank.
$1.7 Trillion in deposits for which they pay 9 basis points! That is incredible earnings power today and in the future (if interest rates ever go up again).
However, I don’t believe interest rates are going up anytime soon.
Half of $BAC income doesn’t come from interest.
However, I don’t believe interest rates are going up anytime soon.
Half of $BAC income doesn’t come from interest.
On the loan side I believe the asset book is improving in credit quality:
Increasing exposure to residential mortgages where collateral is improving;
And reduced exposure in unsecured consumer.
Increasing exposure to residential mortgages where collateral is improving;
And reduced exposure in unsecured consumer.
Conclusion: I’m getting a well run bank (5% ROE after $4 Billion in reserve add last quarter) that generates half its income from fees for less than book value.
