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Strategies & Market Trends : Value Investing -- Ignore unavailable to you. Want to Upgrade?

To: Paul Senior who wrote (49240)	3/19/2013 8:15:02 PM
From: pcyhuang	2 Recommendations Respond to of 78687

BAC as a Value Investment On March 14, 2013, BAC authorized the repurchase of up to $5.0 billion of common stock and the redemption of approximately $5.5 billion in preferred stock, which was approved by the Fed. The company's 2013 capital plan did not include a request to increase the quarterly common stock dividend rate of $0.01 per share. CEO Brian Moynihan stated: We have simplified our company and we have more than adequate capital to support our strategic plans. We are well positioned to return excess capital to our shareholders. We believe buying back common shares is the best way to continue to drive value for our shareholders. The company's Board of Directors also approved the redemption of all the outstanding shares of two series of the company's preferred stock. The 8.20% Non-Cumulative Preferred Stock, Series H, will be redeemed on May 1, 2013, and the 8.625% Non-Cumulative Preferred Stock, Series 8, will be redeemed on May 28, 2013. The redemption price for each of these preferred stock series will be 100 percent of the liquidation preference per share, as specified in the company's certificate of incorporation. Mr. Warren Buffett was not affected by this redemption plan as he owns the Series T, which has no maturity date and ranks senior to the outstanding common stock with respect to the payment of dividends and distributions in liquidation. Fundamentally, there are a few positive factors for BAC: Lower P/B of 0.6 and P/S of 1.6 (vs. the industry averages of 1.0 and 2.3) Lower Forward P/E of 9.8 (vs. the S&P 500's average of 13.9) BAC is currently trading below its book value of $20.24 BAC currently offers a forward annual dividend yield of 0.30% seekingalpha.com