September 7, 2012
Bank of America is up 55% this year and leads all Dow gainers.
Why the 55% spike? Well, unlike fellow megabank JPMorgan Chase, which is dealing with its "London whale" snafu, not much has changed for Bank of America. It's still working through the litigation and toxic loans it was saddled with after its Countrywide purchase. And there's still a real banking business underneath the problems.
The price spike is largely due to where it started the year. Last year was a rough one for B of A. In fact, it led the Dow losers in 2011 and saw its stock price briefly fall below $5 a share. Now between $8 and $9 a share, Bank of America is still valued at less than its book value.
Fool analyst Anand Chokkavelu still thinks there's upside for new Bank of America investors despite the 55% gain, but only for those who can handle the risk.
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