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Ebeling Heffernan Strong Buy Issued on BAC

|Includes: Bank of America Corporation (BAC)

BAC Bank of will report Q3 earnings on Friday the 16th of October. The company Bank of America Corporation (Bank of America) is a bank holding company and a financial holding company. Through its banking subsidiaries and various non-banking subsidiaries throughout the United States and in selected international markets, it provides a diversified range of banking and non-banking financial services and products through three business segments: Global Consumer and Small Business Banking, Global Corporate and Investment Banking and Global Wealth and Investment Management. Bank of America operates in 50 states, the District of Columbia and more than 40 foreign countries. Bank of America has 6,100 banking centers, approximately 18,700 automated teller machines (ATMs), nationwide call centers, and online and mobile banking platforms. On January 1, 2009, Bank of America announced the purchase of Merrill Lynch & Co., Inc. On July 1, 2008, Bank of America completed the acquisition of Countrywide Financial Corporation.

It is widely expected that BAC will bitterly disappoint with their earnings report next Friday, but that has already been factored into the market. But do not be shocked if BAC does a little better than expected. The company has had some time now to re-allign and incorporate Merrill Lynch and Countrywide, cash flow will improve solidly over the next few quarters and BAC will be back beating estimates again in 2010.

Factoring in the debt, dilution and the new acqusitions we have a price target on BAC of $34 in 2010.

Valuation Ratios
  Company Industry Sector S&P 500
P/E Ratio (NYSE:TTM) 39.16 10.90 11.48 43.10
P/E High – Last 5 Yrs. 39.71 1.97 1.42 24.62
P/E Low – Last 5 Yrs. 5.68 0.29 0.35 6.16
 
Beta 2.42 1.10 1.03 1.41
 
Price to Sales (TTM) 1.44 1.72 2.65 1.94
Price to Book (MRQ) 0.76 1.28 1.24 3.19
Price to Tangible Book (MRQ) 1.10 1.45 1.74 6.23
Price to Cash Flow (TTM) 19.99 6.68 4.99 15.15
Price to Free Cash Flow (TTM) 3.00 1.26 3.51 17.67
 
% Owned Institutions

Dividends
  Company Industry Sector S&P 500
Dividend Yield 0.23 0.03 0.07 1.48
Dividend Yield – 5 Year Avg. 5.13 1.27 1.25 2.79
Dividend 5 Year Growth Rate 9.24 8.84 7.53 9.34
 
Payout Ratio(TTM) 131.99 13.41 15.20 85.30

Growth Rates
  Company Industry Sector S&P 500
Sales (MRQ) vs Qtr. 1 Yr. Ago -2.17 -2.96 5.67 -5.54
Sales (TTM) vs TTM 1 Yr. Ago -2.12 8.56 4.04 -1.76
Sales – 5 Yr. Growth Rate 22.41 24.09 17.07 16.01
 
EPS (MRQ) vs Qtr. 1 Yr. Ago -54.13 -23.13 1.20 -20.89
EPS (TTM) vs TTM 1 Yr. Ago -75.67
EPS – 5 Yr. Growth Rate -31.03 12.89 9.45 0.79
 
Capital Spending – 5 Yr. Growth Rate 58.61 9.42 11.93 20.36

Financial Strength
  Company Industry Sector S&P 500
Quick Ratio (MRQ) 0.00 0.83 0.78
Current Ratio (MRQ) 0.00 1.18 0.93
LT Debt to Equity (MRQ) 195.37 87.07 82.43 151.03
Total Debt to Equity (MRQ) 336.41 227.11 224.09 234.38
Interest Coverage (TTM) 0.00 0.08 24.16

Profitability Ratios
  Company Industry Sector S&P 500
Gross Margin (TTM) 0.00 2.30 25.52
Gross Margin – 5 Yr. Avg. 0.00 5.32 25.16
 
EBITD Margin (TTM)
EBITD – 5 Yr. Avg 0.00 3.01 14.59
 
Operating Margin (TTM) 5.26 13.45 3.34
Operating Margin – 5 Yr. Avg. 32.07 25.10 20.52 20.04
 
Pre-Tax Margin (TTM) 5.26 13.45 -1.76 6.64
Pre-Tax Margin – 5 Yr. Avg. 32.07 24.76 20.31 19.76
 
Net Profit Margin (TTM) 6.61 10.76 -3.04 5.47
Net Profit Margin – 5 Yr. Avg. 22.02 18.76 15.51 13.98
 
Effective Tax Rate (TTM) -25.53 9.76 4.78 17.50
Effecitve Tax Rate – 5 Yr. Avg. 31.33 24.92 27.25 28.41

Management Effectiveness
  Company Industry Sector S&P 500
Return on Assets (TTM) 0.35 0.76 -0.00 3.51
Return on Assets – 5 Yr. Avg. 1.03 1.37 1.10 5.02
 
Return on Investment (TTM) 0.00 -0.48 4.78
Return on Investment – 5 Yr. Avg. 0.00 0.45 6.37
 
Return on Equity (TTM) 2.12 8.40 3.28 8.50
Return on Equity – 5 Yr. Avg. 12.08 16.30 11.08 14.81

Efficiency
  Company Industry Sector S&P 500
Revenue/Employee (TTM) 0 1,196,683 485,097
Net Income/Employee (TTM) 0 -593,653 34,017
 
Receivable Turnover (TTM) 0.00 4.15 7.00
Inventory Turnover (TTM) 0.00 0.06 5.39
Asset Turnover (TTM) 0.00 0.01 0.45
 
UA:F [1.6.2_892]

Disclosure: Long BAC