Senior Analyst Jim Sinegal of Morningstar urges investors not to give up on Bank of America Corp (BAC). In a generally difficult banking environment, Sinegal says BAC is one of the more attractive banks.
“I think investors are once again throwing in the towel on Bank of America just as the tide is turning,” Sinegal said. “Consumers are finally starting to lever up again, the big expenses are out of the way, and the company is finally back to day-to-day blocking and tackling.”
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Sinegal says that from a business quality perspective, Bank of America is at least as good as JPMorgan, yet trades at a much lower multiple of tangible book value. He says this is due to bad capital allocation decisions made by previous management.
“They’ve dealt with that, and they should finally be back on offense in the next 12 to 18 months,” Sinegal said. “If you look at their deposit base and their ability to generate noninterest revenue, it’s actually very impressive.”
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