Financials, if not now, then when
November 05, 2007
By: 
Arohan
Category: BAC, Current Events, Investing
Looks like Mr Market has presented us with a great opportunity to scoop up some financial names. With subprime issues and CEO resignations at Merrill Lynch and Citigroup even some of the strongest names have taken a battering. If you, like I did, felt that Bank of America (BAC) was cheap before, now it is almost a no-brainer.
Hmmm, where in the market will you find a strong franchise like BAC, with reasonable growth prospects, recent one-time writedowns notwithstanding, with a mouth-watering-CD-busting 5.75% dividend yield, and a long long history of dividend growth
The problem as I see it, and why the investors are not rushing in, is the uncertainty in general surrounding the financial names. This is a valid reason. However, the investors need to take into account BAC’s low exposure to sub-primes as well as its appetite to make opportunistic investments a la Countrywide and a management team that is generally well regarded. This together with its continued focus on growth (acquiring LaSalle, for example) in underrepresented markets does show that the company is sticking to its way of doing business
It also has a vote of confidence from Mr Buffet
Related posts:
- The best way to buy Bank of America
- Investments update …
- Bought Countrywide and WaMU …
- Countrywide sellout too cheap?
- Recession is here! What should an investor do?
