Yesterday, 9:17 AM
- New additions to Goldman's hedge fund hotels - 50 stocks which most frequently appear among the largest ten holdings of hedge funds: AerCap (NYSE:AER), Assured Guaranty (NYSE:AGO), Baker Hughes (NYSE:BHI), Citizens Financial (NYSE:CFG), Colony Capital (NYSE:CLNY), Dresser-Rand (NYSE:DRC), Family Dollar (NYSE:FDO), Hospira (NYSE:HSP), Netflix (NASDAQ:NFLX), NXP Semi (NASDAQ:NXPI), Pharmacyclics (NASDAQ:PCYC), Visa (NYSE:V), and Walgreens (NASDAQ:WBA).
- Since 2001, the basket has outperformed the S&P 500 in 66% of quarters by an average of 73 basis points. YTD, however, it has underperformed by nine bps. Goldman notes the current basket overweights Consumer Discretionary (22%) and underweights Consumer Staples (2%).
- Looking at the full list, Actavis (NYSE:ACT) leads the way, with 77 funds naming the stock as a top 10 holding. Next up is Apple (NASDAQ:AAPL) with 69, then Facebook (NASDAQ:FB) at 42. For the entire list of 50, the average is 26 funds making a stock a top 10 holding.
- The rest in order: Valeant (NYSE:VRX), Microsoft (NASDAQ:MSFT), DirecTV (NASDAQ:DTV), Citigroup (NYSE:C), Time Warner (NYSE:TWC), Delta (NYSE:DAL), Cheneire (NYSEMKT:LNG), Yahoo (NASDAQ:YHOO), Liberty Global (NASDAQ:LBTYK), AIG, SunEdison (NYSE:SUNE), Air Products (NYSE:APD), Amazon (NASDAQ:AMZN), GM, BofA (NYSE:BAC), JPMorgan (NYSE:JPM), Macquarie Infrastructure (NYSE:MIC), American Airlines (NASDAQ:AAL), Charter Communications (NASDAQ:CHTR), Google (GOOG, GOOGL), Ally Financial (NYSE:ALLY), NorthStar Realty (NYSE:NRF), Priceline (NASDAQ:PCLN), eBay (NASDAQ:EBAY), MasterCard (NYSE:MA), Alibaba (NYSE:BABA), Micron (NASDAQ:MU), Williams (NYSE:WMB), Gilead (NASDAQ:GILD), Berkshire Hathaway (BRK.A, BRK.B), Dolar General (NYSE:DG), NorthStar Asset (NYSE:NSAM), Brookdale Senior (NYSE:BKD), DISH Network (NASDAQ:DISH).
- See also: Goldman updates list of hedge funds most-shorted stocks (May 21)
Wed, May 20, 10:10 AM
- Those facing criminal charges from the DOJ are UBS (already reported, the stock is up 3.4% today), Barclays (BCS +2.5%), Citigroup (C -0.5%), JPMorgan (JPM -0.4%), and RBS (RBS +1.6%).
- Bank of America (BAC -0.4%) faces a $205M fine by the Fed, but no criminal charges. Fines by the Fed for the other banks range from $274M-$342M.
- There are fines from other regulators as well, with the total for all the banks summing to $5.8B. Barclays looks to be hit the hardest on that front, with total monetary penalties of $2.4B.
Fri, May 15, 2:42 PM
- Any talks between Charter Communications (NASDAQ:CHTR) and Time Warner Cable (NYSE:TWC) about a merger may be up in the air, but bankers won't be the bottleneck, as they're ready to talk about $25B or even more to make it happen.
- Following previous reports that Charter could go for $25B-$30B in debt, the cableco is talking with the same four bankers that committed $24B to Charter's early-2014 bid: Bank of America Merrill Lynch (NYSE:BAC), Credit Suisse (NYSE:CS), Deutsche Bank (NYSE:DB) and Goldman Sachs (NYSE:GS).
- As one banker noted, "it should be quick to move to next steps, as the banks know the company pretty well," and said the package should end up as two-thirds bonds.
- Aside from any regulatory issues, leverage seems to be foremost on the mind of dealmakers (and investors). Liberty Broadband's (NASDAQ:LBRDA) Greg Maffei has gone public with the notion that Liberty could raise capital through rights offerings or tap $700M in cash to help with funding while maintaining its 25% stake in Charter.
- Other banks could join in too, which could make such a deal one of the largest junk bonds ever. Time Warner's on the edge of junk status, rated BBB/Baa2 by S&P and Moody's.
Fri, May 15, 7:32 AM
- Bank of America's (NYSE:BAC) stock price and financial performance trail that of its three closest rivals by any number of measurements since he took over in 2010, writes Christina Rexrode, but for now he has the full support of the board (where he became chairman in a controversial move) and an inner circle of lieutenants.
- Moynihan says comparisons may not be fair, noting the Countrywide purchase gave the bank more of a mortgage issue than peers.
- Still, some investors question whether Moynihan's push to greater size and scale will ever pay off. Amid another stress test fumble and a disappointing Q1, BofA is lower by 7.7% YTD vs. a 2.2% gain for the KBW Bank Index. "We've been saying these guys can earn $1.70 or $1.80 [per share], but they continue to struggle to get just to $0.30," says FBR's Paul Miller.
- See also on SA today: Bank Of America: Diamonds Are Forever (May 15)
Thu, May 14, 3:27 PM
- WIth companies holding off on IPOs and investors looking for alternatives to high-priced publicly-traded stocks, private-placements is a growth business, and Bank of America (BAC +0.2%) is looking to get its piece of that expanding pie, forming a new team - the Strategic & Private Capital Solutions Group.
- There are some deals outside of tech, but tech is where the real cheese is, and part of the bankers' job is to convince the companies to use a bank rather than raising money themselves
- Earlier this week, JPMorgan hired a Barclays banker to run private stock placements, and Credit Suisse pulled a former Morgan Stanley rainmaker for similar work.
- Already a big player in the field, Morgan Stanley has bulked up its efforts of late, as has Goldman Sachs.
- Source: WSJ
Fri, May 8, 10:28 AM
- Not one of four Bank of America (BAC -0.1%) directors on the board's governance committee received more than 71.9% of the votes cast this year, compared to all receiving 98% at a minimum in 2014.
- At issue was last year's decision to change the company bylaws to allow CEO Brian Moynihan to also be named chairman. Shareholder advisory firm ISS subsequently recommended voting against the group of four which recommended that change.
- Ahead of the election, the board made a last-minute move to cool heads by promising a full shareholder vote on the new bylaw no later than the 2016 annual meeting.
- Previously: BofA owners to get vote on CEO/Chairman bylaw change (May 4)
Fri, May 8, 8:03 AM
- Bank of America (NYSE:BAC) and JPMorgan (NYSE:JPM), along with Citigroup (NYSE:C) and Synchrony Financial (NYSE:SYF) are being sued for their charming practice of using fancy footwork to keep debts alive on consumers' credit reports after those debts have been legally eliminated in bankruptcy.
- Both BofA and JPMorgan have agreed to update borrowers' credit reports within the next three months to reflect the fact that those debts are no longer there. Last year Synchrony agreed to a similar move at least on a temporary basis.
Wed, May 6, 11:58 AM
- The owner's of Bank of America (BAC -0.2%) re-elected all members of the board and approved the pay package of CEO Brian Moynihan - 94% were in favor, about the same as last year. Moynihan received $13M in 2014, down $1M from the previous year.
- Both ISS and Glass Lewis had recommended a vote against Tom May, head of the board's corporate-governance committee. The board vote margins have not yet been disclosed.
- Source: WSJ
- A vote on approval of a bylaw change allowing the CEO and chairman's spot to go to the same person will have to wait for up to another year.
- Previously: BofA owners to get vote on CEO/Chairman bylaw change (May 4)
Mon, May 4, 8:40 AM
- The Bank of America (NYSE:BAC) board last last year overturned a 2009 rule (approved by shareholders) requiring the CEO and chairman positions be held by two separate people, and made CEO Brian Moynihan chairman.
- Noting the complaints of stockholders who say they should have been given a say on this change, Moynihan and Lead Independent Director Jack Bovender promise a shareholder vote no later than the 2016 annual meeting.
- This year's annual meeting is this week, but that issue will not yet be on the ballot.
Fri, May 1, 3:05 AM
- More than seven years after the global financial collapse, regulators and investors are still working through a mile-high pile of lawsuits and other civil actions, and it seems like the fines keep on coming.
- Since the crisis, banks and other institutions have paid more than $150B in fines, settlements and other penalties, according to a tally by FT. That compares with the roughly $700B in profits generated by U.S. banks between 2007 and 2014.
- So where have all the payments gone? The biggest have landed in the Justice Department, which has collected some $50B. Other heavy collectors include the FHFA, Fannie Mae, HUD and the SEC.
- Among the banks paying the biggest amounts, BofA (NYSE:BAC) tops the list - with nearly $58B, followed by JPMorgan (NYSE:JPM) ($31.3B), Citigroup (NYSE:C) ($12.8B) and Wells Fargo (NYSE:WFC) ($9.7B).
Wed, Apr. 29, 12:14 PM
- The major averages are lower by 0.5% or more, but margin-starved financials are in the green as rates head higher both here and overseas.
- Previously: Major selloff in fixed income (April 29)
- The 10-year U.S. Treasury yield is up six basis points to 2.06% - nearing its highest level of the year - and European yields are shooting up even faster ... All this despite the absence of any GDP growth in the U.S. in Q1.
- Considered perhaps the most "asset-sensitive" of the TBTF banks, Bank of America (BAC +1.9%) is leading that group higher.
- Among regional names: Regions Financial (RF +1.1%), Fifth Third (FITB +1.3%) SunTrust (STI +0.9%), BB&T (BBT +0.8%).
- Insurers: MetLife (MET +2.4%), Prudential (PRU +1.5%), Lincoln National (LNC +1.8%).
Tue, Apr. 28, 8:48 AM
- The SEC is investigating whether complex strategies used by Bank of America (NYSE:BAC) for years to free up billions of otherwise off-limit money for trading violated customer-protection rules and whether the bank misled investigators about what was happening.
- The trades took place in BofA's Merrill Lynch unit - purchased in 2009 - and stopped in mid-2012.
- At issue is a 1972 rule - known in the business as Rule 15c3-3 - designed to make sure banks and trading firms can make good on customer accounts in the event of a failure (see MF Global).
- Source: WSJ
Tue, Apr. 21, 9:37 PM
- "This whole discussion today about when interest rates move is torture for us,” said U.S. Bancorp (NYSE:USB) CEO Richard Davis on last week's earnings call. “I remain very optimistic for the economy … a little less optimistic for the bankers until interest rates start to move up.”
- Earlier today, Regions Financial (NYSE:RF) and Fifth Third (NASDAQ:FITB) became the latest in a line of lenders reporting slimming net interest margins. For Regions, the average yield on its loan portfolio fell to 3.45% from 4.03% a year ago. "You’re trying to book the prudent loans that you have the opportunity to, but with the level of competition in the market, it’s hard to move those rates up absent some kind of interest-rate increase," said Regions chief Grayson Hall on the earnings call.
- On average, U.S. banks with more than $10B in assets showed a NIM of 2.97% in Q4, the lowest level in 25 years according to the FDIC ... And it got worse in Q1. Six of the nine big commercial banks reporting so far - including Wells Fargo (NYSE:WFC) and PNC Financial - had Q1 margins lower than Q4.
- Bank of America (NYSE:BAC) and Regions - two banks seen as particularly sensitive to interest rates - are unsurprisingly the worst performers in the KBW bank index (NYSEARCA:KBE) this year, off 13.9% and 9.3% respectively.
- What to do? Regions, for one, is trying to emulate the Wall Street big boys by bulking up its wealth management and capital markets operations. And maybe there's some more fat to trim. “We’re going to turn up the heat on expenses…and we’ll see where we get to,” said PNC boss William Demchak on last week's conference call.
- Source; WSJ's Peter Rudegeair
- ETFs: XLF, FAS, FAZ, UYG, KRE, VFH, KBE, IYF, IAT, SEF, IYG, FXO, FNCL, KBWB, FINU, QABA, KRU, KBWR, RWW, RYF, FINZ, KRS
Thu, Apr. 16, 4:32 PM
Thu, Apr. 16, 3:43 PM
- The investors didn't reveal how much Bank of America (BAC +1.2%) would pay, but JPMorgan and UBS settled the same suit earlier this year by agreeing to pay $99.5M and $135M, respectively.
- Also part of the deal: Bank of America has agreed to cooperate as the investor group pursues suits against other banks.
- Source: Bloomberg
Thu, Apr. 16, 11:49 AM
- "Investors want to see more," says Morgan Stanley's Betsy Grasek, taking note of Bank of America's (BAC +1.5%) driving down of core expenses and legacy asset costs. The bank's compensation costs to revenue ratio, however, is the highest among both money center banks and the super-regionals (40% vs. median 34%). "We believe they have room to bring this down, especially in a low revenue environment."
- She maintains an Overweight rating and $20 price target.
- Oppenheimer also maintains its positive rating despite what it calls a "dreadful quarter" for BofA. The "one-time" charges of $1.5B for retirement-eligible incentive costs and market-related adjustements to NII may not be so "one-time," says the team, also noting that core expenses are not falling inline with revenue.
- Previously: Stronger mortgage numbers, but weaker trading results as BofA beats estimates (April 15)
- Previously: Citi: BofA a buy on valuation and rate hikes (April 15)
BAC vs. ETF Alternatives
Bank of America Corporation is a bank holding and a financial holding company. Through its subsidiaries, it provides banking and non-banking financial services and products throughout the United States and in selected international markets.
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