Analyst Richard X. Bove of Rafferty Capital Markets says Bank of America Corp (BAC) is the most attractive universal bank at the moment, and that after dealing with various regulatory issues is ready to seek market share.
“It is selling at a discount to book value, and book value is solid,” Bove said. “The company has paid out $70 billion plus in fines and litigation, and it is not going to be paying out $70 billion in fines and litigation over the next few years. The money, which was going to fines and litigation, is now going to go to profits.”
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Bove says Bank of America gave up market share because it was working through these regulatory issues, but the company has now reached a point where it can start to come back and take market share.
“I believe that the Fortune 500 numbers show that there is no company in the United States that has as much common equity as Bank of America does. The management team has been changed. The company has been forced into a more, if you will, disciplined approach to running its business because it has been fined and sued and litigated so much,” Bove said.
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