Bank of America Corp (BAC) Shares Bounce Back After Jim Cramer Says Sell-off is Overdone


Yesterday was a horrendous day for shares of Bank of America Corp (NYSE:BAC) stock, as investors seemed to eagerly be selling it on fears of continual oil price retreats and a possible recession coming up. However, it has bounced back nicely this morning, after CNBC’s Jim Cramer had some positive things to say about the company, and how he feels the sell-off has been taken a bit too far.

“As we have stated in the past, while we are constructive on Bank of America long-term and view the stock’s extreme sell-off as overdone and historically significant (shares are trading well below recessionary levels on a price to tangible book value, or TBV, basis despite the lack of a recession),” explained Jim Cramer and Jack Mohr. “We recognize that the market is no longer trading the name on any specific metric, rendering any valuation floor argument irrelevant for the time being. This is why we have refused to buy into the stock’s recent bout of wholesale selling.”

Cramer and Mohr make some tremendous points, and by the way the stock is reacting today, it appears as though investors agree for the most part. It will be interesting to see if shares continue their upward rebound prior the market’s close before a long weekend.

The stock is up 3.23% or $0.36 following the news, hitting $11.52 per share. About 49.51 million shares traded hands. BAC has declined 32.28% since July 9, 2015 and is downtrending. It has underperformed the S&P500 by 22.81%.

From a total of 19 analysts covering Bank of America (NYSE:BAC) stock, 14 rate it a “Buy”, 0 a “Sell”, and 5 a “Hold”. This means that 74% of the ratings are positive. The highest target price is $21 while the lowest target price is $15. The mean of all analyst targets is $18.62 which is 61.63% above today’s ($11.52) stock price. Bank of America was the topic of 35 analyst reports since July 21, 2015 according to the firm StockzIntelligence Inc. CLSA upgraded shares on January 29 to a “Outperform” rating. Robert W. Baird upgraded shares to a”Neutral” rating and a $18.0 target share price in their report from an August 25. Deutsche Bank maintained BAC stock in a recent report from January 26 with a “Buy” rating. Bernstein upgraded the rating on August 25. Bernstein has a “Mkt Perform” rating and a $19.0 price target on shares. Finally, Jefferies maintained the stock with a “Buy” rating in a report they issued on an October 7.

The institutional sentiment increased to 1.33 in Q2 2015. It’s up 0.32, from 1.01 in 2015Q2. The ratio is positive, as 82 funds sold all their Bank of America Corp shares they owned while 453 reduced their positions. 122 funds bought stakes while 590 increased their total positions. Institutions now own 6.30 billion shares which is 0.74% less than the previous share count of 6.35 billion in 2015Q2.

Mizuho Bank Ltd. holds 56.87% of its total portfolio in Bank of America Corp, equating to 31.25 million shares. Boyle Capital Management Llc owns 1.88 million shares representing 38.47% of their total US portfolio. Moreover, Daily Journal Corp has 28.98% of their total portfolio invested in the company, equating to 2.30 million shares. The Netherlands-based Rabobank Nederland Fi has a total of 27.83% of their portfolio invested in the stock. First Trust Bank Ltd., a Bahamas-based fund reported 380,720 shares owned.

Bank of America Corporation is a bank holding firm and a financial holding company. The company has a market cap of $111.74 billion. The Firm is a financial institution, serving individual consumers, small- and middle-market businesses, institutional investors, firms and Governments with a range of banking, investing, asset management and other financial and risk management services and products. It has 8.94 P/E ratio. Through its banking and various nonbank subsidiaries, it provides a range of banking and nonbank financial services and products.