Unfortunately, Bank of America Corp (NYSE:BAC) has been dealing with legal costs accrued from the financial crisis and they just disclosed larger-than-expected legal expenses of $6 billion, just in the first quarter! BAC is still paying dearly for its mortgage issues almost 6 years after the financial crisis. However, Credit Agricole analyst, Mike Mayo, has a strong history recommending BAC and recently advised BUY BAC. Mike is confident that the second largest bank will benefit from recovery and rising rates and now is the time to BUY.
Mike has an 80% success rate recommending Bank of America Corp (NYSE:BAC) and has earned a +6.5% average return over S&P-500, with an overall 59% success rate recommending similar bank stocks. To see all of Mike’s past recommendations, download TipRanks.
In 2012, Mike recommended SELL BAC after the stock fell 4.0%. At the time, Mayo was concerned about several things: “The main issues we have with Bank of America at the moment are: a) the lack of quality earnings (average 10 one-time/unusual items per quarter since 1Q10); b) unresolved mortgage issues ($16bn in reps and warranty reserves plus more for litigation, but still adding each quarter); and c) concerns of lost share in consumer (cards/mortgage), brokerage and investment banking.” This recommendation earned Mike +14.8% over S&P-500. Back in 2009, Mike recommended BUY BAC, earning one of his highest returns of +56.7% over S&P-500.
Mike has also seen success recommending BUY Citigroup (NYSE:C) last month. Even though Citigroup failed the Fed’s stress test, Mike still argued on behalf of the company: “I’m a definite buyer of Citigroup here. Don’t forget the stock’s down 90 percent from pre-crisis. They are a unique restructuring story in an industry with serious revenue headwinds.” Mike earned +2.8% over S&P-500.
Even with his successful recommendations, Mike has experienced a few losses, including his SELL BNY Mellon Corp. (NYSE:BK) recommendation. Mike said that “BNY Mellon failed to produce desired scale benefits given underperforming in efficiency, earnings and the stock price.” However, this recommendation left Mike with -2.4% over S&P-500.
Yet, regardless of a few losses, Mike has been able to see returns as high as +32.7% over S&P-500, which he earned back in 2011. Mike recommended SELL Bank of America Corp (NYSE:BAC) after Warren Buffet announced that he would make a $5 billion investment. Mike saw this move as “a vote of confidence, which helps reassure about solvency, but does not alleviate concerns about the stock.” Mike added that the “investment reinforces the status quo despite recent failures by the company to put behind it issues related to expenses, legal, management and guidance.”
Mike has followed Bank of America Corp (NYSE:BAC) for a long time, adjusting his recommendations according to the situation, seeing successes and high returns. To see if Mike’s latest BAC recommendation proves his recommendation strength, download TipRanks, and start making informed financial decisions with advice you can trust.