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Are Investors Wrong to Be Selling Bank of America Stock Now?
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The successful investors take rational decisions based on solid reasons rather than their emotions. On the flip side, the normal investors follow their emotions and overlook the long term benefits they would get by staying invested.
Whenever the stock market dives, those successful investors look for opportunity to take fresh positions in stocks at a discounted price. Uninformed investors, on the contrary, sell their stocks in panic when their stocks underperform.
The S&P 500 index has witnessed its fifth day of loss since last week. On Tuesday, the index lost by 1.2%. The biggest loser in the benchmark was Bank of America Corporation(BAC - Free Report) , which tanked 5.81%. Other finance stocks like Citigroup Inc. (C - Free Report) and JPMorgan Chase & Co. (JPM - Free Report) each fell roughly 3%, and The Goldman Sachs Group, Inc. (GS - Free Report) tumbled 2.6%.
Majority of the U.S stocks plunged on Tuesday following the uncertainty in the market regarding when the Trump administration will implement regulatory reforms. Further, on Thursday the House of Representatives would vote on the Trump supported American Healthcare Act. Despite Trump’s support, the probability of passing the Bill is not definite.
Amid such a controversial environment in the U.S, you may think of dumping Bank of America stock, which lost significantly in the last few days. But, we would advise you to bet on it and take the advantage of the low entry point, as it has strong fundamentals.
The bullish rank is driven by an upward earnings estimate revision of 1.2% for the current year, over the last 60 days. The stock gained 47.7% over the past six months, outpacing the 31.9% gain for the Zacks categorized Banks - Major Regional industry.
Bank of America looks cheap on the basis of its price-to-earnings (P/E) and PEG ratios. The company has a P/E ratio of 13.97 compared with the industry average of 14.9. Also, the company’s PEG ratio of 1.64 is below the industry average of 2.02.
Further, the company is witnessing persistent growth in revenues over the past few years. Its cost control initiatives will continue to support the bottom line. Further, persistently improving loan balances should aid organic growth in the quarters ahead. In addition, the company is expected to deliver sales growth of 7.65% compared with the industrial projected sales growth of 5.22%.
Bank of America has witnessed EPS growth of 39.5% over the past three to five years compared with 9.4% for the industry. Moreover, this earnings momentum is likely to continue in the near term as reflected by the company’s projected EPS growth rate of 17.5% for 2017. Also, the company’s long-term (three to five years) estimated EPS growth rate of 8.5% promises rewards for investors in the long run.
Subsequent to the hikes in Dec 2016 and Mar 2017, the company increased its prime lending rate. Also, management is optimistic about favorable impact of the rate hike on margins in the quarters ahead.
"5 Trades Could Profit ""Big-League"" from Trump Policies
If the stocks above spark your interest, wait until you look into companies primed to make substantial gains from Washington's changing course.
Today Zacks reveals 5 tickers that could benefit from new trends like streamlined drug approvals, tariffs, lower taxes, higher interest rates, and spending surges in defense and infrastructure. See these buy recommendations now >>
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Are Investors Wrong to Be Selling Bank of America Stock Now?
The successful investors take rational decisions based on solid reasons rather than their emotions. On the flip side, the normal investors follow their emotions and overlook the long term benefits they would get by staying invested.
Whenever the stock market dives, those successful investors look for opportunity to take fresh positions in stocks at a discounted price. Uninformed investors, on the contrary, sell their stocks in panic when their stocks underperform.
The S&P 500 index has witnessed its fifth day of loss since last week. On Tuesday, the index lost by 1.2%. The biggest loser in the benchmark was Bank of America Corporation (BAC - Free Report) , which tanked 5.81%. Other finance stocks like Citigroup Inc. (C - Free Report) and JPMorgan Chase & Co. (JPM - Free Report) each fell roughly 3%, and The Goldman Sachs Group, Inc. (GS - Free Report) tumbled 2.6%.
Majority of the U.S stocks plunged on Tuesday following the uncertainty in the market regarding when the Trump administration will implement regulatory reforms. Further, on Thursday the House of Representatives would vote on the Trump supported American Healthcare Act. Despite Trump’s support, the probability of passing the Bill is not definite.
Amid such a controversial environment in the U.S, you may think of dumping Bank of America stock, which lost significantly in the last few days. But, we would advise you to bet on it and take the advantage of the low entry point, as it has strong fundamentals.
Bank of America currently carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here .
The bullish rank is driven by an upward earnings estimate revision of 1.2% for the current year, over the last 60 days. The stock gained 47.7% over the past six months, outpacing the 31.9% gain for the Zacks categorized Banks - Major Regional industry.
Bank of America looks cheap on the basis of its price-to-earnings (P/E) and PEG ratios. The company has a P/E ratio of 13.97 compared with the industry average of 14.9. Also, the company’s PEG ratio of 1.64 is below the industry average of 2.02.
Further, the company is witnessing persistent growth in revenues over the past few years. Its cost control initiatives will continue to support the bottom line. Further, persistently improving loan balances should aid organic growth in the quarters ahead. In addition, the company is expected to deliver sales growth of 7.65% compared with the industrial projected sales growth of 5.22%.
Bank of America has witnessed EPS growth of 39.5% over the past three to five years compared with 9.4% for the industry. Moreover, this earnings momentum is likely to continue in the near term as reflected by the company’s projected EPS growth rate of 17.5% for 2017. Also, the company’s long-term (three to five years) estimated EPS growth rate of 8.5% promises rewards for investors in the long run.
Subsequent to the hikes in Dec 2016 and Mar 2017, the company increased its prime lending rate. Also, management is optimistic about favorable impact of the rate hike on margins in the quarters ahead.
"5 Trades Could Profit ""Big-League"" from Trump Policies
If the stocks above spark your interest, wait until you look into companies primed to make substantial gains from Washington's changing course.
Today Zacks reveals 5 tickers that could benefit from new trends like streamlined drug approvals, tariffs, lower taxes, higher interest rates, and spending surges in defense and infrastructure. See these buy recommendations now >>