BAC-WT - Bank of America Warrants

[Matson125]

http://www.bizjournals.com/memphis/news/2015/07/06/home-buyers-don-t-catch-break-u-s-mortgage-rates.html

 

On the last Conference call  the CFO was very bullish on mortgages.  This is welcome news for the bank

[Uccmal]

Well, the last few days were a reasonable buying opportunity.  I picked up some 2017 Leaps for trading purposes. 

[kab60]

EPS of 45c vs. analyst expectations of 36c. Revenue 1b higher than expected.

[ERICOPOLY]

From the slide deck of Q2 earnings presentation:

 

 

Under the fully phased-in Advanced approaches 5, the estimated CET1 ratio increased to 10.4% from 10.1% in 1Q15, due to higher CET1 capital as well as lower RWA

– As previously disclosed, U.S. banking regulators have requested modifications to certain wholesale (e.g., commercial) and other credit models to exit parallel run, which is estimated to negatively impact the CET1 ratio; if these modifications were included, the estimated CET1 ratio would be approximately 9.3% at 2Q15

 

[tylerdurden]

From the slide deck of Q2 earnings presentation:

 

 

Under the fully phased-in Advanced approaches 5, the estimated CET1 ratio increased to 10.4% from 10.1% in 1Q15, due to higher CET1 capital as well as lower RWA

– As previously disclosed, U.S. banking regulators have requested modifications to certain wholesale (e.g., commercial) and other credit models to exit parallel run, which is estimated to negatively impact the CET1 ratio; if these modifications were included, the estimated CET1 ratio would be approximately 9.3% at 2Q15

 

Are they going to need more capital? Is that the point? They are building capital w/ each quarter right so this 9.3% would increase above 9.5%, which is Fed target for BofA I think in a couple of quarters... It could have an impact on potential capital returns for 2016 though...

[ZenaidaMacroura]

edited /My original comment was factually incorrect!

[fareastwarriors]

Are we finally turning the corner?

[LC]

178B to 188B in terms of market cap. if +10B is turning the corner, i can't wait to see what's ahead.

[RadMan24]

178B to 188B in terms of market cap. if +10B is turning the corner, i can't wait to see what's ahead.

 

Few years ago it was $50 billion...

 

Those $30 strike warrants still got a chance! If they can just reduce shares outstanding 10% and add another $100 billion in market cap :D

[tylerdurden]

178B to 188B in terms of market cap. if +10B is turning the corner, i can't wait to see what's ahead.

 

Few years ago it was $50 billion...

 

Those $30 strike warrants still got a chance! If they can just reduce shares outstanding 10% and add another $100 billion in market cap :D

 

Google added $65B MCap in one day so why not BAC adds $100B in 3 years :D

[orthopa]

http://finance.yahoo.com/news/why-expert-thinks-bank-america-174717855.html

 

He is famous! ;D

[CorpRaider]

Pretty neat!

[Mephistopheles]

Nice, Nate!

 

But why the day trader type talk?!

 

"He noted that the stock has seen a pattern of selling heading into earnings that cause "dramatic drops" in price - as though investors are scared. Then, when earnings beat expectations, the price "shoots right back up again." "

 

"Tobik said that Bank of America could provide a good opportunity for traders in the wake of earnings."

 

"Tobik argued that JPMorgan Chase & Co. (NYSE: JPM) was a "decent stock to hold on to for a while," as the price continues to push above previous resistance points. "

[Munger_Disciple]

Bruce Thompson out.

 

http://www.wsj.com/articles/bank-of-america-financial-chief-exits-as-part-of-shakeup-1437604259

[CorpRaider]

HR to control of stress test submissions and living wills?  Seems odd to me, but I'm glad it seems maybe some consequences for the prior screw ups. 

[OracleofCarolina]

HR to control of stress test submissions and living wills?  Seems odd to me, but I'm glad it seems maybe some consequences for the prior screw ups.

 

probably left to "spend more time with his family"

[oddballstocks]

http://finance.yahoo.com/news/why-expert-thinks-bank-america-174717855.html

 

He is famous! ;D

 

Glad you found and posted this, I would have missed it otherwise, a really cool mention.  I didn't know this stuff appeared on Yahoo.  Here is the full interview:

 

As to FITB (the question I flubbed), revenue flat like the other regionals.

 

If I had to build out a trade for banks it might look like this:

Mega banks: Buy and hold, still attractive, will earn inflation + GDP growth and maybe a percentage on top of that going forward.

Regionals: I think the ultimate winners in the US, might take 5-10 years to fully develop

Community Banks: Eventually a dead, or mostly dead sector, but where the action is now.  These guys will eventually merge their way into the regional category.

[meiroy]

http://finance.yahoo.com/news/why-expert-thinks-bank-america-174717855.html

 

He is famous! ;D

 

Glad you found and posted this, I would have missed it otherwise, a really cool mention.  I didn't know this stuff appeared on Yahoo.  Here is the full interview:

 

As to FITB (the question I flubbed), revenue flat like the other regionals.

 

If I had to build out a trade for banks it might look like this:

Mega banks: Buy and hold, still attractive, will earn inflation + GDP growth and maybe a percentage on top of that going forward.

Regionals: I think the ultimate winners in the US, might take 5-10 years to fully develop

Community Banks: Eventually a dead, or mostly dead sector, but where the action is now.  These guys will eventually merge their way into the regional category.

 

BAC just hit 3% YTD barely passing S&P for the first(?) time this year. Why would you buy and hold a mega bank with serious qualitative issues when options are available for trading it? BAC is the gift that keeps on giving to the small investor.

 

[oddballstocks]

http://finance.yahoo.com/news/why-expert-thinks-bank-america-174717855.html

 

He is famous! ;D

 

Glad you found and posted this, I would have missed it otherwise, a really cool mention.  I didn't know this stuff appeared on Yahoo.  Here is the full interview:

 

As to FITB (the question I flubbed), revenue flat like the other regionals.

 

If I had to build out a trade for banks it might look like this:

Mega banks: Buy and hold, still attractive, will earn inflation + GDP growth and maybe a percentage on top of that going forward.

Regionals: I think the ultimate winners in the US, might take 5-10 years to fully develop

Community Banks: Eventually a dead, or mostly dead sector, but where the action is now.  These guys will eventually merge their way into the regional category.

 

BAC just hit 3% YTD barely passing S&P for the first(?) time this year. Why would you buy and hold a mega bank with serious qualitative issues when options are available for trading it? BAC is the gift that keeps on giving to the small investor.

 

I agree with you on BAC, read what I said in the interview.  It appears to be the ultimate trading stock selling off before earnings then rebounding.  I don't trade and I don't know how to read charts, but the pattern is clear.  If you know options or whatever else then that's probably an even better way to play it.

 

My point is that large banks are becoming more utility-like.  This is clearly how the government sees them, and I think investors should have a similar view.  Their scale is incredible, they throw off too much cash to reinvest.  They'll pay significant dividends or buyback a lot of shares going forward.  Similar to a utility.

[meiroy]

http://finance.yahoo.com/news/why-expert-thinks-bank-america-174717855.html

 

He is famous! ;D

 

Glad you found and posted this, I would have missed it otherwise, a really cool mention.  I didn't know this stuff appeared on Yahoo.  Here is the full interview:

 

As to FITB (the question I flubbed), revenue flat like the other regionals.

 

If I had to build out a trade for banks it might look like this:

Mega banks: Buy and hold, still attractive, will earn inflation + GDP growth and maybe a percentage on top of that going forward.

Regionals: I think the ultimate winners in the US, might take 5-10 years to fully develop

Community Banks: Eventually a dead, or mostly dead sector, but where the action is now.  These guys will eventually merge their way into the regional category.

 

BAC just hit 3% YTD barely passing S&P for the first(?) time this year. Why would you buy and hold a mega bank with serious qualitative issues when options are available for trading it? BAC is the gift that keeps on giving to the small investor.

 

I agree with you on BAC, read what I said in the interview.  It appears to be the ultimate trading stock selling off before earnings then rebounding.  I don't trade and I don't know how to read charts, but the pattern is clear.  If you know options or whatever else then that's probably an even better way to play it.

 

My point is that large banks are becoming more utility-like.  This is clearly how the government sees them, and I think investors should have a similar view.  Their scale is incredible, they throw off too much cash to reinvest.  They'll pay significant dividends or buyback a lot of shares going forward.  Similar to a utility.

 

I don't think it's necessary to be able to read charts or know patterns (I haven't the clue how to do that) to see how to trade BAC.  It is fundamentally undervalued under a certain range + volatile stock = money.

 

[Uccmal]

http://finance.yahoo.com/news/why-expert-thinks-bank-america-174717855.html

 

He is famous! ;D

 

Glad you found and posted this, I would have missed it otherwise, a really cool mention.  I didn't know this stuff appeared on Yahoo.  Here is the full interview:

 

As to FITB (the question I flubbed), revenue flat like the other regionals.

 

If I had to build out a trade for banks it might look like this:

Mega banks: Buy and hold, still attractive, will earn inflation + GDP growth and maybe a percentage on top of that going forward.

Regionals: I think the ultimate winners in the US, might take 5-10 years to fully develop

Community Banks: Eventually a dead, or mostly dead sector, but where the action is now.  These guys will eventually merge their way into the regional category.

 

BAC just hit 3% YTD barely passing S&P for the first(?) time this year. Why would you buy and hold a mega bank with serious qualitative issues when options are available for trading it? BAC is the gift that keeps on giving to the small investor.

 

I agree with you on BAC, read what I said in the interview.  It appears to be the ultimate trading stock selling off before earnings then rebounding.  I don't trade and I don't know how to read charts, but the pattern is clear.  If you know options or whatever else then that's probably an even better way to play it.

 

My point is that large banks are becoming more utility-like.  This is clearly how the government sees them, and I think investors should have a similar view.  Their scale is incredible, they throw off too much cash to reinvest.  They'll pay significant dividends or buyback a lot of shares going forward.  Similar to a utility.

 

I don't think it's necessary to be able to read charts or know patterns (I haven't the clue how to do that) to see how to trade BAC.  It is fundamentally undervalued under a certain range + volatile stock = money.

 

 

I loaded up when it was below 17 during the Greece/China thingy.  Have sold most off into this rally.  Will load up again during the next 'crisis' and sell again when all looks rosy again.  It is the perfect trading stock with liquid Options, and slightly undervalued so it you get stuck awhile you dont feel too bad.

[fareastwarriors]

Executive Departure Draws Attention to Bank of America’s Growth Strategy

 

http://www.nytimes.com/2015/07/28/business/dealbook/executive-departure-draws-attention-to-bank-of-americas-growth-strategy.html?ref=dealbook

[CorpRaider]

"The departing C.F.O., Mr. Thompson, 50, was widely seen as the person in line to fill Mr. Moynihan’s shoes, but his star dimmed, people briefed on the matter said, after the bank miscalculated its capital levels by $4 billion last year.

 

Mr. Moynihan was angry at Mr. Thompson and his team for the mistake, people briefed on the matter said. He appointed a trusted former FleetBoston colleague to take over the bank’s preparation for its stress test submissions, a job that had been done by the C.F.O." - NYT

 

"Star dimmed" is that NYT speak for "went supernova and exploded into flames"?  I'm not Moynihan fanboy, but it seems like there had to be some accountability for some pretty glaring failures.

[tylerdurden]

"The departing C.F.O., Mr. Thompson, 50, was widely seen as the person in line to fill Mr. Moynihan’s shoes, but his star dimmed, people briefed on the matter said, after the bank miscalculated its capital levels by $4 billion last year.

 

Mr. Moynihan was angry at Mr. Thompson and his team for the mistake, people briefed on the matter said. He appointed a trusted former FleetBoston colleague to take over the bank’s preparation for its stress test submissions, a job that had been done by the C.F.O." - NYT

 

"Star dimmed" is that NYT speak for "went supernova and exploded into flames"?  I'm not Moynihan fanboy, but it seems like there had to be some accountability for some pretty glaring failures.

 

Thompson wanted another job that he can manage some business; that's why he is no longer the CFO. If he didn't have other aspirations he would have been still the CFO I think. There is a lot of filling the dots coming from the journalists as usual. They need some sensational news so they can cover their pages and sell some newspapers...

[CorpRaider]

Yeah i read that account as well.  To me, it seems less likely he left to go run another bank, but he just doesnt quite know which one yet.  Especially, given the impressive performance of his units in the stress tests.  But maybe he will be announced ceo in waiting of jpm in a week or two and it will support that story.