1. Bank of America Corporation (NYSE:BAC)
Forward P/E Ratio as of September 16: 10.47
Number of Hedge Fund Holders: 92
Bank of America Corporation (NYSE:BAC) is a financial holding company that provides a wide range of services, including savings accounts, deposits, wealth and cash management, investment funds, online banking, and various other financial services.
Deutsche Bank upgraded Bank of America Corporation (NYSE:BAC) from Hold to Buy, raising its price target to $45. The stock has underperformed its peers in the Bank Index (BKX), falling 8.5% over the past six weeks, while the BKX gained 1%. This underperformance is mainly due to the widely publicized sale of shares by Berkshire Hathaway and Warren Buffett, as well as concerns over net interest income being impacted from expected rate cuts and slow loan growth across the sector. However, Deutsche Bank sees the recent drop in Bank of America Corporation (NYSE:BAC)’s share price as an attractive entry point, highlighting the stock as undervalued.
In Q2 2024, Bank of America Corporation (NYSE:BAC) added 278,000 net new checking accounts, bringing the total to over 500,000 for the first half of the year. The wealth management division gained 6,100 new relationships, while the commercial sector grew by thousands of small business accounts and hundreds of commercial banking relationships. The bank now manages $5.7 trillion in client balances, loans, deposits, and investments across its consumer and wealth management segments.
Hedge fund interest in Bank of America Corporation (NYSE:BAC) has also increased, with 92 funds holding stakes in Q2 2024, up from 82 in the previous quarter. These stakes are collectively valued at over $48 billion.
ClearBridge Investments, an investment management company, released its first quarter 2024 investor letter. Here is what the fund said:
“We added several new positions during the quarter. Our largest new addition was Bank of America Corporation (NYSE:BAC), one of the world’s leading financial institutions, serving some 66 million consumer and small business clients across the U.S. as well as large corporations, financial institutions and governments globally. We believe that the interest rate pressure that Bank of America faced in early 2023 has subsided, and risks surrounding deposit outflows have abated, which should allow the company to improve its book value and capital growth as well as benefit from a rebound of capital markets activity.”
While we recognize the potential of BAC as an investment, we believe certain deeply undervalued AI stocks offer greater prospects for higher returns in a shorter period. If you’re seeking an AI stock with even more promise than those on our list and trading at less than 5 times its earnings, check out our report about the cheapest AI stock.
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