Value Investing Message Board

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Strategies & Market Trends : Value Investing

Public Reply Prvt Reply Mark as Last Read File

Previous 10 Next 10 Previous Next

To: hardincap who wrote (44655)	9/28/2011 8:32:54 PM
From: Paul Senior	Read Replies (4) of 78673

BAC. $30B non-performing? I didn't know it was that much. It's a lot. If I assume none of the loans will yield anything and that they'll all be written down to zero, then that would be $30B on 10B shares outstanding, or $3/per share. On a 6 dollar stock. With tangible book value reported to be at $11 now (although with these black-box banks, who really knows?), that write down would bring tangible to $8, I guess. (I don't know what tangible amounts of BAC assets those loans actually represent -- I presume $3/sh) With stock now at ~$6 and $8 tangible bv, the stock could still be a value buy. Especially if most people then believed the really bad times were finally concluded with this $30B write-down. BAC also would have hefty tax-loss carry forwards to offset any subsequent gains in earnings. So what could be a reasonable downside to the stock? Not sure what reasonable is, or how far down down could be. I'll just say maybe the $6 stock goes to $3 if all non-performing loans ($3/sh worth) are written off. Which might make BAC a very good buy: $3 stock price with a tangible book value of $8. I'm intending to add to my position as BAC stock drops. Small amounts though.

Report TOU Violation

Share This Post

Public Reply Prvt Reply Mark as Last Read File

Previous 10 Next 10 Previous Next