Price Is Right?
After shunning large lending companies, billionaire value investor Michael Price bought shares of Bank of America (BAC) in its $19.3 billion equity sale on Dec. 3, and says he plans to buy more. The company, whose stock fell 66% in 2008, plans to repay $45 billion in Troubled Asset Relief Program (TARP) funds.
Price says Charlotte (N.C.)-based BofA is the only large U.S. bank that he owns. Its price could rise above $20 if profit reaches $2 a share, he says. The average per-share profit estimate of analysts surveyed by Bloomberg is 96 cents for 2010 and $2.10 for 2011. BofA's stock is up about 10% this year.