Were Hedge Funds Right Betting On These Finance Stocks in Q4?

 #2 Bank of America Corp (NYSE:BAC)

-Hedge Funds with Long Positions (as of September 30): 108

-Aggregate Value of Hedge Funds’ Holdings (as of September 30): $6.49 billion

Shares of Bank of America Corp (NYSE:BAC) advanced by nearly 10% during the final quarter of 2015. However, that rise was not enough to recoup the losses it suffered earlier in the year as it ended the year down by over 7%. It seems several hedge funds had anticipated that after falling during the third quarter, the stock would rebound  in the fourth quarter and that’s why the number of funds with long positions increased by 13 during the July-September period.

On December 10, the Federal Reserve approved Bank of America Corp (NYSE:BAC)’s resubmitted stress test and allowed it continue paying dividend to investors and buy back shares under its $4 billion repurchase plan. However, the Fed noted that although the bank has made some progress it must “continue to make steady, demonstrable progress” going forward. The Fed also raised concerns about the quality of the bank’s process, including the level of detail it used in its risk models. Bank of America Corp is scheduled to again go through a stress test this summer.

For the last quarter of 2015, Bank of America managed to beat the EPS estimates, reporting $0.28, versus $0.25 expected, while its revenue inched up by 4% on the year to $19.76 and was slightly lower than the $19.82 billion estimated. At the same time, due to lower legal costs, Bank of America posted a total profit of $15.89 billion for the full year, which is the best result reported in nearly a decade.