Top picks 2013: Bank of America
This out-of-favor financial appears set for a long-term turnaround.
My choice for a favorite stock in last year's Top Picks report was Lennar (LEN), which has since risen 96%. That selection stemmed from my belief that the housing sector was poised for a big turnaround. We now rate the stock a hold. We don't see anything wrong with Lennar, but we also don't see lots of upside power at this point.
For 2013, I see another much-hated group ready to turn up — financials. That's why I'm making Bank of America (BAC) my pick for the coming year.
As a group, the big banks have now had five full years to shape up. They've been helped along by an incredibly easy Federal Reserve (now buying $40 billion of mortgage debt every month) and, ironically, a housing rebound, which has improved many firms' balance sheets.
And, though most investors don't know it, earnings for the group are buoyant.
As for Bank of America itself, it's likely to pass an upcoming stress test and finally be able to return $5 billion to $10 billion to shareholders through a dividend boost and share repurchases.
Throw in the fact that earnings are projected to leap 129% next year to 96 cents per share, and the fact that the stock actually hit new yearly highs in December (even as the market was struggling), and it's clear to me that the turnaround is underway.
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If they increased the dividend and came out with good earnings I wouldn`t be surprised
if it would double in a year.
DIE BANK OF AMERICA DIE !! A CRIMINAL ORGANIZATION OUT TO RAPE, PILLAGE AND PLUNDER THE MIDDLE CLASS THE ELDERLY AND THE YOUNG ! NO RESPECT FOR IT'S LOW END CUSTOMERS=SCREW THEM EVERY WAY YOU CAN ! LOUSY STOCK PICK FOR 2013 MIKE. ! B/A WILL COLLAPSE AND FAIL !
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John Stumpf acknowledges that growth has been slow, but he says he's still optimistic.
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