On February 9th, 2016, I wrote the article: “Bank of America Stock: Getting Dirt Cheap” in which I argued:
But when the earnings are so high relative to the price of the stock, why would you discard it now? This is the fun part–the rocket is about take off. Whether it happens quickly or takes a few years shouldn’t matter, as the magnitude of the waiting capital gains is so substantial that it is worth the opportunity cost of an extended delay for the market to price it accordingly.
What caught my attention at the time is that it was making $17 billion in net profits while only being valued at $160 billion. I thought this made the stock quite cheap. It remained unfashionable for a while because the dividend payment was so low at only 15% of profits. People buying Bank of America only got a 1% … Read the rest of this article!