Even Walmart Is Down on Bank of America

Don't let it get away!

Keep track of the stocks that matter to you.

Help yourself with the Fool's FREE and easy new watchlist service today.

The past week has been rough for Bank of America (NYSE: BAC  ) , as problems pile on and its subpar behavior graced headlines. Toward the end of last week, it even looked as if the big old bank was losing some of its shine, as investors punished it brutally -- admittedly in a less than upbeat market -- after the stock had attained and held a position well above $13 per share for several days.

Even a corporate client appears to be considering giving the bank a big kiss-off. Reuters reports that megaretailer Walmart (NYSE: WMT  ) is interviewing banks to oversee its $15.6 billion 401(k) retirement plan -- an occupation that has been the task of Bank of America's Merrill Lynch division for the past 15 years.

Why now?
Reuters notes that, while Walmart's retirement plan has high turnover and relatively small account balances, which might dull interest in taking over the plan, its sheer size is unusual, and may be why Wells Fargo (NYSE: WFC  ) has entered into talks concerning taking over administrative duties from BAML. Bank of America is involved in these talks, too, which may turn into a bidding war. According to benefits company Brightscope, other large retailers such as Costco (NASDAQ: COST  ) and Target (NYSE: TGT  ) each have plans with assets in the $5 billion range.

Though experts say that benefit plans should be put out to bid every five years in order to secure the best deal, this is seldom done. Considering that Bank of America has been servicing Walmart's plan for a decade and a half, it makes me wonder why the retailer has chosen this particular time to begin the bidding process.

One reason could be that Wells is actively pursuing such work. The bank took on the retirement plan of home improvement giant Lowe's three years ago, which gives them a leg up on other possible competitors. Another is new regulations that require administrators to divulge their fees to clients, which may have prompted this action.

The bad news keeps piling on
It is likely the last issue that pushed Walmart into soliciting bids, although no reason was given. While this seems more likely than the fact that that B of A has been going through a rough patch in the public relations arena lately, it's still one more piece of bad news that the big bank just doesn't need right now.

Wells Fargo's dedication to solid, conservative banking helped it vastly outperform its peers during the financial meltdown. Today, Wells is the same great bank as ever, but with its stock trading at a premium to the rest of the industry, is there still room to buy, or is it time to cash in your gains? To help figure out whether Wells Fargo is a buy today, I invite you to download our premium research report from one of The Motley Fool's top banking analysts. Click here now for instant access to this in-depth take on Wells Fargo.

Read/Post Comments (0) | Recommend This Article (3)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

Be the first one to comment on this article.

Compare Brokers

Fool Disclosure

Sponsored Links

Leaked: Apple's Next Smart Device
(Warning, it may shock you)
The secret is out... experts are predicting 458 million of these types of devices will be sold per year. 1 hyper-growth company stands to rake in maximum profit - and it's NOT Apple. Show me Apple's new smart gizmo!

DocumentId: 2505488, ~/Articles/ArticleHandler.aspx, 9/28/2016 1:09:28 PM

Report This Comment

Use this area to report a comment that you believe is in violation of the community guidelines. Our team will review the entry and take any appropriate action.

Sending report...

Today's Market

updated Moments ago Sponsored by:
DOW 18,213.11 -15.19 -0.08%
S&P 500 2,157.05 -2.88 -0.13%
NASD 5,298.53 -7.18 -0.14%

Create My Watchlist

Go to My Watchlist

You don't seem to be following any stocks yet!

Better investing starts with a watchlist. Now you can create a personalized watchlist and get immediate access to the personalized information you need to make successful investing decisions.

Data delayed up to 5 minutes

Related Tickers

9/28/2016 12:53 PM
BAC $15.21 Down -0.09 -0.56%
Bank of America CAPS Rating: ****
WFC $45.03 Down -0.06 -0.14%
Wells Fargo CAPS Rating: ****
WMT $71.74 Down -0.60 -0.82%
Wal-Mart Stores CAPS Rating: ***