Bank of America Corp (BAC): Can It Ever Eclipse $13.00?

Bank of America Corp (NYSE:BAC) had a pretty decent week, relatively speaking. It was boosted earlier in the week when news of a settlement with MBIA reached the markets, and even some threatened legal action by the state of New York didn’t affect it all that much. Even Friday morning, with Citigroup Inc (NYSE:C) and JPMorgan Chase & Co. (NYSE:JPM) relatively flat, Bank of America Corp (NYSE:BAC) remains slightly higher.

Bank of America Corp (NYSE:BAC)Meeting resistance
It was a little less than two weeks ago that my colleague John Grgurich wondered if Bank of America Corp (NYSE:BAC) would remain closer to $10 than not. Obviously, it seems to have pushed past this threshold, but it seems to be meeting resistance around $13 a share. Granted, it is only in the past couple of days that the stock has traded above this level, but there has been numerous times over the past few months where it has approached, but not exceeded, this price:

BAC Chart

BAC data by YCharts.

What does it mean?
In general, we at the Fool believe that daily stock price movements are unimportant unless there is some news surrounding the move. With a stock that gets as much coverage as Bank of America Corp (NYSE:BAC), however, sometimes it’s important to see if there are any reasons why it’s not moving and where it could ultimately end up.

As anyone that follows Bank of America Corp (NYSE:BAC) knows, it is currently trading at a steep discount to book value, and a slight discount to tangible book value. Among the Big Four banks, Bank of America Corp (NYSE:BAC) ”wins” the price/book value battle, while Citigroup Inc (NYSE:C) barely beats B of A in the price/tangible book value fight:

Company Book Value per Share Tangible Book Value per Share Price/Book Value Price/Tangible Book Value
Bank of America $20.30 $13.46 0.64 0.97
Wells Fargo $28.27 $23.30 1.36 1.65
JPMorgan Chase $52.02 $39.54 0.96 1.26
Citigroup $62.51 $52.35 0.78 0.94

Source: 2013 First Quarter filings; prices as of May 8, 2013.

Based on its book value alone, there seems to be plenty of room for Bank of America to grow. However, the consensus analyst estimate is currently $12.87, meaning it is trading just north of what the “experts” seem to think. Personally, I think the true value of the bank lies somewhere between its book value and tangible book value, so it’s only a matter of time before it manages to leave $13 solidly in its rearview mirror as it heads toward these heights.

The article Is $13 the New Ceiling for Bank of America? originally appeared on Fool.com.

Fool contributor Robert Eberhard has no position in any stocks mentioned. The Motley Fool recommends Wells Fargo. The Motley Fool owns shares of Bank of America, Citigroup, JPMorgan Chase, and Wells Fargo.

Copyright © 1995 – 2013 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.

blog comments powered by Disqus
Insider Monkey Headlines
Insider Monkey Small Cap Strategy
Insider Monkey Small Cap Strategy

Insider Monkey beat the market by 52 percentage points in 24 months Click to see monthly returns in table format!

Lists

Best States To Practice Medicine

The 10 Best States to Have a Business

The 12 Most Expensive Apple (AAPL) Apps in the Market

The 10 Richest Billionaires in the World

10 Biggest Kickstarter Failures

The 10 Best Places to Work At

The Top 10 of Google Inc (GOOGL)’s Most Expensive Acquisitions

13 Best Cities to Visit in South America

10 Most Expensive Works of Art of All Time

The 10 Richest Banks in the World

The 10 Best-Paying Jobs in America (2014)

7 Most Expensive Foods in the World

The World’s Top 10 Earning Authors

Five Wicked and Very Expensive Items (and Other “Stuff”) Sold on eBay

10 Biggest Celebrity Bankruptcies

The Top 10 Highest Paid CEOs in 2014

The 10 Most Expensive Real Estate Cities in America

10 Most Expensive States To Live In America

The 10 Best Airlines in the World

The 10 Best-Selling Cars in 2014

The 10 Best Industries to Invest In

The 10 Most Expensive States to Own a Car In

Top 10 Business Schools in US: 2014 Rankings

Top 20 Female Billionaires in 2014

6 Movies That You Should Watch to Better Understand The Cold War

Top 15 Best Paying Jobs for Women in 2014

Top 6 Things Rich People Do Differently Every Day

5 Retirement Mistakes To Avoid (and Einstein’s Famous Quote)

11 Smartest People in the World

6 Films About the Financial World You Need To Watch (While “The Wolf” is Not Around)

Warren Buffett and Billionaires Are Crazy About These 7 Stocks

The Top 10 States With Fastest Internet Speeds

10 Best Places to Visit in USA in August

Top 10 Cities to Visit Before You Die

Top 10 Genetically Modified Food In the US

15 Highest Grossing Movies Opening Weekend

5 Best Poker Books For Beginners

10 Strategies Hedge Funds Use to Make Huge Returns

Top 10 Fast Food Franchises to Buy

10 Best Places to Visit in Canada

Best Summer Jobs for Teachers

10 Youngest Hedge Fund Billionaires

Top 10 One Hit Wonders of the 90s

Fastest Growing Cities In America

Top 10 U.S. Cities for Freelancers

Top 9 Most Popular Free iPhone Apps

Top 10 Least Expensive Private Business Schools in the US

Top 15 Most Expensive Countries in the World – 2014

Top 6 Tax Scams and How to Protect Yourself

Top Businesses to Invest In

Subscribe

Enter your email:

Delivered by FeedBurner

X

Thanks! An email with instructions is sent to !

Your email already exists in our database. Click here to go to your subscriptions

Insider Monkey returned 47.6% in its first year! Wondering How?

Download a complete edition of our newsletter for free!