Tag Archives: BAC

The Safety Valve Of Dividend Growth Investing

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In the past five or so years, there have been five prominent dividend growth companies that experienced dividend cuts (or worse) which realistically could have been a part of a conservative dividend growth investor’s portfolio.

(1) There was the collapse of Wachovia. What made this so unfortunate is that Wachovia had been a conservatively run bank with $40 per share in book value that drained its liquidity during the mid 2000s when business was booming, and did not have the cash and cash equivalent resources to weather the storm that erupted in 2008.

(2) There was the collapse at Bank of America (BAC). The banking giant, which had spent most of the 20th century burnishing its reputation as a financial fortress (I’m referring here to the pre-merger California arm of the bank), overextended itself on leverage while conducting acquisitions, and caused permanent harm to shareholders through its excessive share count


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An Economic Shocker Is In The Cards This Week

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mkaminisBy Markos Kaminis (Wall St. Greek):

The Federal Reserve will update its economic forecasts this week. It’s something it does quarterly, and it is time once again for it. Three key data points are projected, including GDP, PCE price inflation and employment expectations. It is no news to followers of my column that I find issue with the Fed’s forecast for Real GDP. Well, I believe that it will have to come clean Wednesday, in that it will finally adjust its growth outlook lower. Many other major institutions see slower growth for the U.S. than the Federal Reserve sees, and the Fed has even contradicted itself in this regard. So an economic shocker is in the cards if the Fed cuts its growth outlook significantly this coming week, though readers of this column would not be surprised.

The Fed has pretty much been forecasting the same level of growth for 2013 for far too long now.


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Bill Gross’s Misguided Diagnosis Of America’s Economic Problems

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In a recently published report entitled “Wounded Heart,” Bill Gross offered a really bizarre diagnosis of certain problems in America’s financial system and economy – complete with all sorts of muddled medical metaphors.

Fortunately for Mr. Gross, and all of us that provide commentary on economic and financial affairs, people cannot be prosecuted for malpractice for merely expressing opinions. However, I do believe that ideas have consequences. And, for this reason, I am concerned that the faulty analysis propounded by Mr. Gross in the aforementioned essay (and subsequent follow-up media appearances) could gain currency amongst economic and financial analysts and/or the public at large.

Thus, in my most recent article published on Seeking Alpha entitled “Bill Gross’s Dreadful Analysis of America’s Wounded Heart,” I demonstrated that the central thesis in Mr. Gross’s report was clearly wrong on both empirical and conceptual grounds. I strongly encourage


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Bill Gross’s Dreadful Analysis Of The U.S. Economy’s ‘Wounded Heart’

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Basketball living-legend Lebron James shot an air-ball during last Thursday night’s Game 1 of the NBA Championships; he also threw up a brick at a key moment in Game 1 of the series against the Chicago Bulls that didn’t even touch rim. That ugly-looking heave by “King James” reminded me of a recently published essay entitled “Wounded Heart,” penned by “The Bond King” Bill Gross, a living legend in the investment field. King James’ embarrassing off-balance, double-clutch, fade-away floater reminded me of The Bond King’s essay because the latter struck me as containing some of most fundamentally unsound economic and financial analysis I have ever seen published by a respected analyst – much less from an investment hall of famer.

In "Wounded Heart," Gross argues that US Federal Reserve policies such as QE (Quantitative Easing) and ZIRP (Zero Interest Rate Policy) are destroying the "beating heart" of


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Bank Of America Is Subject To Short-Term Volatility

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ByFundamental Analyst:

Tapering appears to be the new "hot topic" for the U.S. macroeconomic framework. The low interest rate environment has substantially impacted the economy by supporting its recovery. On the other hand, the idea that this support from monetary expansion will, in time, begin to taper off, is being witnessed with a lot of caution as this macroeconomic event is expected to impact every industry. The performance of financial services industry has remained restricted in the low interest rate environment as the net interest margins for banks have been restrained. Therefore, the notion of tapering will introduce interesting dimensions in the financial services market. Similarly, the housing prices have shown a substantial improvement as the Case Schiller Housing Prices Index has shown a remarkable upswing. Going forward, the spillover effects of changes in the housing sector will also have far reaching consequences for the banking sector, specifically for the banks with


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Citigroup: U.S. Banking Stocks Indicating An Upward Surge

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ByFundamental Analyst:

US banking stocks are indicating an upward surge as earnings reports for the industry showed impressive performance over the last quarter. The industry as a whole has been subject to increasing regulatory pressures in the post crisis scenario. Also, the top line growth for banks in the US has shown signs of stagnation. The economy as a whole is facing a low interest rate environment which has been adversely affecting the margins for banks. In the face of such circumstances, banks have done a decent job in recent quarters to project earnings growth through focused cost cutting on various fronts of the business. Through this analysis, I’m to evaluate Citigroup (C) against its peers as a prospective investment opportunity.

Industry Performance and Positioning

Banking stocks have been recovering in recent periods due to improvement in some key sectors of the economy. Specifically in terms of consumer confidence, housing prices and


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Wall Street Breakfast: Must-Know News

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Wall Street Breakfast Editors submit:

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Sunbelt apartment firms to merge in $8.6B deal. Colonial Properties Trust (CLP) and Mid America Apartment Communities (MAA) have agreed to merge in a deal that will create a Sunbelt-focused apartment REIT with a combined market cap of about $8.6B. Under the terms of the agreement, each CPT share will be converted into 0.36 of a newly issued MAA share.

Eurozone PMI improves markedly but recession still on. Eurozone manufacturing PMI rose to a 15-month high of 48.3 in May from 46.7 in April, with the downturn easing across the bloc, although price deflationary pressures remained. Of particular note was Spain, whose PMI jumped to its best level in two years with an increase to 48.1 from 44.7. However, the overall eurozone data “still suggest that GDP is likely to have fallen 0.2%” in Q2, says Markit, extending the eurozone’s recession into a seventh quarter.

Drug


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Cramer’s Mad Money – 11 Things To Watch In The Week Ahead (5/31/13)

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By SA Editor Miriam Metzinger:

Stocks discussed on the in-depth session of Jim Cramer’s Mad Money TV Program, Friday May 31.

11 Things To Watch In The Week Ahead: Dollar General (DG), Bank of America (BAC), JPMorgan (JPM), Brown-Forman (BF.A), (BF.B), Ascena (ASNA). Other stocks mentioned: Barrick Gold (ABX), Sony (SNE), Lions Gate Entertainment (LGF)

With the Dow down on Friday over 200 points, Cramer believes that what is responsible for the decline is good news, not bad news. When there is positive economic data, hedge funds fear the Fed might end its policy of low interest rates, and as a result, they tend to dump certain stocks, like high yielders, MLPs and REITs. Cramer would be cautious about dividend stocks, and look at banks and industrials. Cramer discussed the game plan for the week ahead.

Sunday Night/Monday

Chinese non-manufacturing PMI is going to be released on Sunday night. Cramer expects it to be


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