The following video is part of our "Motley Fool Conversations" series, in which senior analyst Anand Chokkavelu, CFA, discusses topics across the investing world.
Assessing Bank of America involves weighing two big factors.
On the one hand, Bank of America is darn cheap, both historically and relatively. Historically, it's trading at a quarter of what it's averaged over the last two decades. It's cheaper than any of its big peers, from Wall Street bank Goldman Sachs to Main Street bank Wells Fargo to fellow hybrids JPMorgan and Citigroup.
But on the other hand, Bank of America suffers from the same regulatory and black-box risks as its peers as well as heightened mortgage litigation risk due to its Countrywide purchase. The question is whether the cheapness outweighs the very real, virtually impossible to quantify risks.
In the video below, Anand gives his thoughts (he thinks Bank of America is a buy for some, and "too hard" for others).
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Anand Chokkavelu owns shares of Bank of America, Citigroup, Wells Fargo, and JPMorgan Chase. He also owns long-dated options on Bank of America and warrants on Citigroup, Wells Fargo, and JPMorgan Chase. The Motley Fool owns shares of JPMorgan Chase, Bank of America, Wells Fargo, and Citigroup. The Fool owns shares of and has created a covered strangle position in Wells Fargo. Motley Fool newsletter services have recommended buying shares of The Goldman Sachs Group. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.