On balance this was a good reporting cycle for the banks and the sector has modestly outperformed the S&P 500 since earnings began. For Bank of America (BAC) it wasn't an especially strong quarter, but then there really weren't any issues that cause me any lingering concerns about the business plan or managements ability to execute. More than anything, I think of this quarter and Bank of America like someone sitting in their car glancing at their watch and wondering when they'll be able to finally get going.
I didn't really see Bank of America as notably undervalued when I last wrote about the stock, and instead thought it was valued in line with the larger banks. Since then the shares have moved almost in lockstep with the larger bank index (the KBW Nasdaq Bank Index (BKX)). I still don't see enough fundamental undervaluation here to make it a must-own, but I do think it's a perfectly valid option for longer-term holders - the one caveat is that Bank of America's high asset-sensitivity would be a drag if rates stay for longer, but also a way to play a more aggressive investor view on rates.
Read the full article at Seeking Alpha:
Bank Of America Fueled Up And Ready To Go When Rates Cooperate
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