Considering that Bank of America shares have lost more than 60% in 2011 through Tuesday's close, it is hard to see what could go worse for the bank. It hasn't shown a full-year profit since 2008, and though analysts as a group are estimating a profit of $0.03 per share for 2011, according to SNL Financial, some, such as Sandler O'Neill's Jeff Harte, believe the bank will finish 2011 in the red once again.
How Bank of America (BAC) will perform next year definitely makes it a stock to watch in 2012. After the markets closed on Wednesday, it was announced that the company and its Countrywide financial unit agreed to pay a $335 million dollar settlement over discrimination against minority homeowners. This is probably the least of Bank of America's lawsuit worries going forward, as I have written in previous articles here and here.
However, should the company weather the storm, there is tremendous upside in owning the stock or by purchasing call options. One strategy that I wrote an article about on Seeking Alpha that minimizes risk if you would like to take advantage of a possible upswing, but one that can also profit should the stock fall further, is the 'short call ladder' options strategy. Bank of America's stock is either going to really take off in price from its current price or it will completely tank in 2012. Using a neutral-bullish strategy is a smart move. For the latest updates on the stock market, visit Source seekingalpha.com For the latest updates PRESS CTR + D or visit Stock Market news Today
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