Apple Inc. (AAPL): Is Bank of America Corp (BAC) a Better Buy?

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Business & risks
Each company is at a different kind of crossroads. At its core, Apple Inc. (NASDAQ:AAPL) is based on innovation, and it could be just one new (or improved) product away from its lofty heights of last year. As we approach the two-year anniversary of Jobs’ death in October, it is hard to say how his ideas may continue to influence the company. The iPad Mini may well have been the first step away from Jobs’ stable of products, and there may truly be something new coming. We won’t know for sure until it actually appears — iWatch and iTV chatter notwithstanding.

Bank of America Corp (NYSE:BAC) is in the midst of “Project New BAC,” trying to clean up its balance sheet and launch a new way of doing business. One surefire way to get going on this new path is to start putting some of its known liabilities behind it so it can focus on some of the unknowns mentioned above. It is currently battling insurer MBIA Inc. (NYSE:MBI) about some Countrywide mortgages and has been on the losing end in two recent decisions. It could be time to just settle the suit and shift its focus elsewhere.

Is Bank of America the better buy?
Bank of America appears to have most of its major issues behind it, and it’s trading at an extreme discount to book value. In my opinion, this makes it the better buy today. That said, I don’t think Apple Inc. (NASDAQ:AAPL) is a bad stock. It simply has more to prove in the short term. I could be wrong to favor Bank of America Corp (NYSE:BAC), but with first-quarter earnings right around the corner, we’ll have a good idea of whether it’s heading in the right direction.

The article Is Bank of America a Better Buy Than Apple? originally appeared on Fool.com and is written by Robert Eberhard.

Fool contributor Robert Eberhard has no position in any stocks mentioned. The Motley Fool recommends Apple. The Motley Fool owns shares of Apple and Bank of America.

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