VGStockz: General Questions

[Ail]

Train wreck said:
I think that a lot of people are loading up on BAC in that they want to be able to be shareholders of record when they announce their big dividend payout. They cant do it now but I can see a big payout sometime later in the year early next year.

There won't be any dividend  increase this year.

The only reason BAC passed the stress test is that they had no plan to do dividends or buy backs.

Citigroup had such plans and they failed the stress test because of those and were told to cancel their plans by the Feds...

Besides Bank of America isn't sitting on such big pile of cash, even if they raise their dividend next year, at best it will go from 0.5% to 1.5 or 2% and there are plenty of companies with higher dividends and better dividends growth potentials than BAC ( like GE or Microsoft).

I think all the investors that fled the financials in 2011 are now coming back now that things are better and the Feds told everyone most of the banks were now solid...( remember the market overall was flat in 2011 but financials were down 20 to 50%, BAC was down 58% and 10% more in 2010).

And Bank of America is still down a lot  compared to its high of 2008, the stock will never get back to that price ( especially as they are 2.5 times more share outstanding than during the crisis  so if the stock went back to 50$ that would give them a market cap of 500 billion$ whereas their all time high was 206 billion$ in 2007) but I can see at some point Bank of America reaching a  market cap of around 160 billion$ or so which would be a share price of  14-15$ or so...Higher if they start buying back shares next year ( 10 billion shares outstanding, they could easilly buy back 500 millions share in 2012).

 

Heck I just looked and the market cap was 143 billion$ in early 2011 so getting back to that  seems at least reasonnable and that means a 40% more increase in the stock..

 

Anyway I got in at 8$ hoping for a 25% increase in 2012 but I will only sell if it gets past 16$ in 2012 which is doubtfull...( anything past 16$ in 2012 is just a new bubble waiting to burst).