This Dow Stock Could Spell Opportunity
On Monday, I mentioned Roger Altman's call that a housing market recovery "should become a boom by 2015." Perhaps the boom has already begun: It turns out that housing starts rose 15% last month -- higher than all 81 forecasts in a Bloomberg survey of economists and the highest level since July 2008. This is evidence for recent comments by executives at top banks including JPMorgan Chase, Wells Fargo, and Bank of America (NYS: BAC) that the housing market has turned. It's certainly easier to take bankers seriously when they predict that a trend will revert to the mean than when they argue that house prices could go the moon, as they did in the mid-2000s.
And speaking of B of A, the lender broke even last quarter, according to its earnings report released this morning. This compared favorably with expectations for a $0.07 per-share loss, but the bottom-line number is polluted with litigation costs and an accounting charge for revaluing the bank's own debt. Note that mortgage originations rose 18%, as the housing market has -- you guessed it -- "clearly begun to turn a corner," per CFO Bruce Thompson.
The market appears to be shrugging its shoulders at the results, with the shares up just 0.2% as of 10 a.m. EDT. However, one of our top banking analysts, Anand Chokkavelu, thinks they could represent a "big opportunity" for investors with some tolerance for risk. For a balanced assessment of that opportunity, click here to request Anand's premium report on Bank of America, along with a year's worth of updates.
The article This Dow Stock Could Spell Opportunity originally appeared on Fool.com.Alex Dumortier, CFA has no positions in the stocks mentioned above; you can follow him @longrunreturns. The Motley Fool owns shares of Bank of America. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.
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