Rochdale Securities vice president of equities research Richard Bove told Forbes magazine in an interview that he believed Bank of America Corp (NYSE: BAC)’s stock price would increase to $19.00 sometime next year, an increase of more than 30%.
“Right now you can buy Bank of America for I’m going to say a nickel on the dollar,” Bove said.
“In other words, the market capitalization of Bank of America is actually 5.6% of the assets of Bank of America. So you’re putting up a nickel to get a buck’s worth of assets. That is extraordinarily low. In other words, you should expect to buy banks for 14 or 15 cents on the asset dollar and more than that of course in good times. It strikes me that this bank is selling at a massive discount to its real value and I think that once this acquisition wave begins, people are going to start coming back to banks and you’ll see Bank of America’s stock price rise. I think Bank of America’s earnings will be going up. Plus Bank of America will be making tremendous divestitures,” he added.
Bank of America Corporation is a bank holding company, and a financial holding company. The Company is a financial institution, serving individual consumers, small and middle market businesses, large corporations and governments with a range of banking, investing, asset management and other financial and risk management products and services. Through its banking subsidiaries (the Banks) and various nonbanking subsidiaries throughout the United States and in selected international markets, it provides a range of banking and nonbanking financial services and products through six business segments: Deposits, Global Card Services, Home Loans & Insurance, Global Banking, Global Markets, Global Wealth & Investment Management (GWIM), with the remaining operations recorded in All Other. On January 1, 2009, the Company completed the acquisition of Merrill Lynch.
Shares of Bank of America Corp (NYSE: BAC) traded up 0.85% during mid-day trading on Friday, hitting $13.61.
