The Bank of America (NYSE:BAC) Stock Has More to it Than Meets the Eye
The Bank of America (NYSE:BAC) has once again made the headlines. Media’s focus was only on certain facts that it missed important details investors need to know. As the headlines flashed this week, the bank’s CEO, Brian Moynihan made a public statement that the bank expects trading revenues to fall in its global markets business. He also indicated that improvements in Wall Street trading desks can’t seem to help the matter. But lucky for them, they aren’t the only Bank facing such loss, Citigroup (NYSE:C) CEO Michael Corbatt also announced an expected 5% loss in market revenue.
What the media seemed to have cut out is how far the Bank of America (NYSE:BAC) has come in the past three years.
Back in 2011, when the economy toppled, Bank of America (NYSE:BAC) witnessed its net income for shareholders go from $14.8billion in 2007 to just $3.2 billion in the 4 consecutive years till 2011. Even though other banks met similar fate, the Bank of America (NYSE:BAC) was the center of attention. It was when Warren Buffett gave $5 billion into investment that the bank started reaching new heights and continues making extraordinary progress. For example, the BAC project initiative has met with cost saving worth $2 billion in one quarter. Additionally, the firm has also cut down on expenses of its Legacy Asset Services unit from $2.9 billion in the third quarter of 2012 to an expected $1.1 billion in the first quarter next year.
The aftermath of that investment still shines as the bank expects its total expenses for 2015 to be $15 billion, less than they were in 2011. Besides the cost saving, the bank has flourished in operations of its core businesses. For example its biggest banking units of Consumer and business and Global have seen income rise of 12% or $1 billion in the first nine months of 2014.
One key element that was shown as a last bullet point on Tuesday’s presentation was that fourth quarter sales are expected to go down year over year. Even though this is enough to make investors shaky, let’s not forget the three years of massive improvement that the bank has undergone, and none of those elements show any signs of slowing down in the near future. This might just be all the assurance investors might need to stick to their stocks or purchase more. The Bank of America (NYSE:BAC) has proved its stability and worth in the past three years in a way that no one would be able to point fingers at it. How the investors respond now, will come into light in a matter of weeks. If there still is hesitation on the investors mind than that blame should be given to the media for not taking all factors into perspective. But at this stage this stock seems to be a safe bet.
The market can be quite unnerving when it comes to banks, and it remains to be seen how Bank of America (NYSE:BAC) will escape the stigma.