As a banking giant with a nationwide presence and a $149 billion market cap, it's no surprise that there's plenty of retail and institutional interest in Bank of America
Turns out, the view is "mostly bullish." Let's have a look at a few of the key sentiment drivers.
1. Analyst opinion
Analysts have a favorable opinion of Bank of America. Data from Yahoo! Finance captures their collective feeling:
Nine analysts have a "strong buy" rating, with an additional 10 "buys." Many analysts (11) are a "hold," but there aren't any with a "sell" rating.
For purposes of this exercise, we'll classify analyst opinion as mostly bullish.
2. Insider buying
Next we'll look at insider buying and selling. Over the past year, Bank of America insiders have sold $227,870 worth of their company stock. However, during the same time period, insiders bought about $1.59 million worth of stock. (Data from Form4Oracle.)
While neither amount is all that meaningful relative to Bank of America's market cap, this is a great sign: Insider buying far outweighs insider selling (by a margin of $1.37 million). Thus, we'll classify insider buying/selling as bullish.
3. Guru buying
Next, we'll look at "guru" ownership of the stock. According to GuruFocus, gurus were net buyers of Bank of America in the quarter ended Dec. 31. Richard Snow, Don Yacktman, and Warren Buffett reduced or eliminated their positions (more on Buffett's selling below). But seven gurus purchased BofA in the last quarter of 2010, including George Soros, Bruce Berkowitz, David Tepper, and Richard Pzena.
Though the guru picture was mixed, more gurus were buying than selling, so we'll call the trend "somewhat bullish" for Bank of America.
4. Retail investor community sentiment
For retail investor community sentiment, I turn to Motley Fool CAPS, our proprietary stock rating system. CAPS generates ratings on a one- to five-star scale, with five stars as the highest ranking, indicating that the Fool community believes in a stock's future. Bank of America has a neutral three-star rating.
Next we'll look at whether short-sellers are circling the stock. There are 79 million Bank of America shares sold short, according to Capital IQ. As a percentage of shares outstanding, that's a short interest of 0.8%. That's not very high -- struggling operator Barnes & Noble has a short interest of 13.5% right now -- so for determining sentiment, we'll take it as a good sign.
6. Does Buffett own it?
This is the "cherry on top" test, and in Bank of America's case, it's a no: Berkshire Hathaway sold out of its position in the most recent quarter. It's likely that the BofA stake was taken not by Buffett but by GEICO's Lou Simpson, in any event.
Adding it up
Analysts, insiders, and gurus are bullish on Bank of America, and short-sellers aren't betting against the stock in a significant way. Although the CAPS community is neutral on the stock, and though Berkshire Hathaway just disclosed that it sold the stock in the quarter ended Dec. 31, Bank of America still comes out with a "mostly bullish" consensus sentiment.
Of course, you can't base an investment philosophy on who likes the stock you like, and a consensus opinion can sometimes be a scary thing. Quoting Buffett: "A simple rule dictates my buying: Be fearful when others are greedy, and be greedy when others are fearful." There doesn't seem to be a sense of greed circling Bank of America right now, though.
The purpose of this series of articles isn't to make a definitive buy-or-sell call on BofA. Rather, by looking at a stock's sentiment, the goal is to help you place your own opinion of it in a broader context.
One final thing: If you want to keep tabs on Bank of America's movements, and for more analysis on the company, make sure you add it to your watchlist.
Fool.com managing editor Brian Richards does not own shares of any companies mentioned. Berkshire Hathaway is a Motley Fool Inside Value selection and a Motley Fool Stock Advisor recommendation. The Fool owns shares of Bank of America and Berkshire Hathaway. Through a separate Rising Star portfolio, the Fool is also short Bank of America. The Fool and has a disclosure policy.