Bank of America Corp (BAC) is among the financials that are rebounding from lows from the depths of the recession, and even as the money center bank has tripled in value, Rafael Resendes, Managing Director at Toreador Research And Trading, says he will remain fully invested in the stock.
“We continue to hold a very large position in Bank of America, as I mentioned. We haven’t reduced our position in that stock at all yet, even though it’s almost tripled. We still don’t see a reason to sell it, the value is still there, the company is still rationalizing its asset base and had not yet begun to demonstrate its earnings power. We think the next couple of years for that stock are very promising going forward,” Resendes said.
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Resendes says he started a position in BAC two years ago, taking advantage of the reduced valuation in financial companies’ stock after the sell-off.
“We saw firms such as Bank of America trading down around $5 a share at end of 2011, and essentially, we made financials the largest concentrated portion of our fund, not so much from the quantitative side, though it definitely showed up there, but on the opportunistic side. I think at the time Bank of America probably constituted about a 6% investment for our fund. Today, it’s now up to close to 16% through appreciation,” Resendes said.