Bank of America is a Gift from God Here

Bank of America (NYSE: BAC) took a hard fall after its executive team failed to accurately report its regulatory capital ratios to the Federal Reserve. The company had its capital plans frozen as a result. With expectations for a sharp dividend increase and share repurchases built into the stock price, investors were disappointed. And then the company’s earnings outlook required a second look, given the accounting errors and the absence of share repurchases. That leveled the stock, cutting 6% off its value in one day. But, after all that, I suggest Bank of America (NYSE: BAC) is now a gift for those who do not yet own the stock. The company has resubmitted its third-party reviewed capital figures and its financial plans to the Fed, and is now on a 75 day wait for approval. The stock is deeply discounted to peers, trading at just 1.1X tangible book value, versus 1.65X for Wells Fargo (NYSE: WFC), 1.34X for J.P. Morgan Chase (NYSE: JPM) and 2.05X for U.S. Bancorp (NYSE: USB). If BofA could attain the average value of itself and those peers and trade at a conservative 1.5X tangible book, it would be worth 37% more than it is today. That is a gift from God for new entrants. Please see our full report here for a more detailed analysis of Bank of America.