We recently published a list of Jim Cramer is Talking About These 10 Stocks as Markets Rebound. Since Bank of America Corp (NYSE:BAC) ranks 3rd on the list, it deserves a deeper look.
Jim Cramer in his latest program on CNBC talked about the latest rebound in the markets followed by a major selloff on Monday, saying we can “fret” about the interest rates, jobs market or mortgage rates, or we can just buy the stocks of “tremendous” companies and hold on to them.
“Stock prices have become so dependent on the macro, the carry trade, the Fed chatter, that it’s impossible to give you a pat answer even as I’ve told you over and over again that corporate America is doing much better than anyone would expect at this point in the cycle,” Cramer said.
Cramer lamented yet again that people believe a 25bps decline in interest rates could somehow “motivate” people to increase spending and on these hopes they often buy “phony” ETFs.
Cramer also said that the Fed won’t begin to cut rates until it sees consumers “rebelling” against higher prices forcing companies to roll back price increases to pre-COVID levels. Jim Cramer believes we now have an “empowered consumer” who is willing to make choices and choose options that are cheaper and better.” He said that during the pandemic, amid higher liquidity, people were willing to accept higher prices, but not anymore.
For this article we watched several latest programs of Jim Cramer and picked 10 stocks he’s talking about. Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 275% since May 2014, beating its benchmark by 150 percentage points (see more details here).
Bank of America Corp (NYSE:BAC)
Number of Hedge Fund Investors: 82
Cramer in a latest program recommended a caller to buy Bank of America “right here,” saying:
“I think this company is selling very inexpensively and it’s a good one.”
Bank of America Corp (NYSE:BAC) recently posted strong-than-expected Q2 results and gave strong guidance for net interest income despite rate cut expectations.
Bank of America profited from rising interest rates by raising loan rates while delaying increases for depositors. Over the past two years, higher rates from the central bank boosted its net interest income significantly. In the second quarter of 2024 Bank of America Corp (NYSE:BAC) earned $13.9 billion in net interest income, a $300 million decrease from the previous quarter.
Bank of America Corp (NYSE:BAC) forecasts a $600 million increase in net interest income for 2024, despite expecting three interest rate cuts. This projected boost is expected to strengthen the bank’s financial position and sustain its bullish trend. The bank’s stock remains attractively valued with a positive risk/reward outlook.
A significant positive development for Bank of America Corp (NYSE:BAC) this year is the rise in investment banking fees, which increased 29% year-over-year in Q2, contributing 17.3% to net income. Continued growth in these fees is expected to further enhance the bank’s profitability.
ClearBridge Value Equity Strategy stated the following regarding Bank of America Corporation (NYSE:BAC) in its first quarter 2024 investor letter:
“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.”
Overall, Bank of America Corp (NYSE:BAC) ranks 3rd on Insider Monkey’s list titled Jim Cramer is Talking About These 10 Stocks as Markets Rebound. While we acknowledge the potential of Bank of America Corp (NYSE:BAC), our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns, and doing so within a shorter timeframe. If you are looking for an AI stock that is more promising than BAC but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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Disclosure: None. This article is originally published at Insider Monkey.
