Bank of America huge buy

Discussion in 'Stocks' started by stock_trad3r, Jun 26, 2008.

  1. Bank of America makes huge revenue from overdraft fees, loans, and other sources. It only has a PE of 10 and it is literally giving away cash in the form of dividends. The last one was 65 cents!! That is a huge yield. While other financial companies are cutting dividends Bank of America is increasing theirs.

    A very strong buy at 25.42
  2. gobar


    how abt bcs...
    pe of 4 and dividend yield of 14%.

    no one knows whats the actuall PE with all those writeoffs and markdowns + BAC bought 2 billion of CFC @ $18 and they will have to write down @ some point by cutting dividend.
  3. Bank of America and GS are the cream of the crap in terms of financial companies. The BAC chart looks pretty bad but you have to factor in the huge dividends. Once you do that BAC is only 'down' 15% in the past three years.
  4. 1) Crap and cream rise to the top.
    2) Is the dividend sustainable when the dividend yield equals the earnings yield, i.e. all of the current earnings are paid out in the form of a dividend?
    3) Is it better to wait for an actual announcement of a dividend reduction before the "expected" massive short-covering rally can happen?
  5. LOL! :D

  6. Daal


    dividends as percentage of earnings is 104% according to yahoo(payout ratio). doenst look safe at all. I know meredith whitney is backing the ceo on the dividend but I dont think its worth the risk. increase bac share count by 25% and this doesnt look so cheap
  7. Consumers are tapped out. They're closing or soon will close many more accounts at BofA. Why pay fees and other charges to them. Economy is forcing companies and public to cut, cut, cut and that will severely hurt businesses who deal with public/business at the same time. Pain, pain, pain. Paying a dividend in this environment is stupid. I think they do it to keep their stock artificially high so they won't be bought out by some foreign bank like Barclays or Santander, etc.

    Or, worse yet, be bought by some monster high cap Chinese bank. I read yesterday somewhere there's a Chinese bank with a $300billion+ market cap. Imagine that!

    I wonder what the stupid putzes in Washington would say about such a proposition?!
  8. The housing bill once passed will be the green light to get into BoA. Right now the game plan is to take that TSLF money and plow it into oil and commodities. Issue sell signals on anything to get the market tanking inorder to get people panicing to get that housing bill passed no matter how ridiculous its been worded.
  9. Daal


    btw, stock_trader, is there anyway you wont hold your promise that you will leave if we enter a official bear?we will miss you too much, forget about the promise, its not like you know what you are doing anyway, dont leave
  10. This sucker is the next Washington Mutual. With that high dividend.. it is ripe for a short opportunity. Given that it will successfully acquired CFC with Lewis's attitude of constantly throwing good money into the bad.

    I wonder if BAC will take Spirit Points from back in the day as collateral for a short position. Ha ha.
    #10     Jun 26, 2008