Jim Cramer thinks Bank of America is bottoming.
On Mad Money last night he addressed one of the biggest concerns hammering the firm’s stock, its unknown mortgage exposure. Cramer doesn’t think the firm’s mortgage liabilities exceed $30 billion.
“… there could be as much as $30 billion in legal exposure… they are reserved for a lot of that when you take the Buffett money and the sale from the Chinese bank… the litigation risk is not as bad as people think.”
He said on Mad Money last night that of course all banks will post lower earnings (which is because of regulations and the poor economic outlook, primarily) in the future, but Bank of America has done “nothing” and it’s share price has been hammered lower more than any other U.S. bank.
“The earnings risk is different… when people are cutting JPMorgan’s earnings estimates, BAC is not going to make a lot of money. They are going to make money, though… It has done nothing, it has been a loser. I think it was bottoming when Warren Buffett bought it, and here, I think it is bottoming.”
Bank of America’s CEO Brian Moynihan spoke at the Barclays Capital Global Financial Conference this week about the company’s future. Looks like he convinced Cramer. The hedge fund manager turned TV show host said pretty much exactly the same thing Moynihan said on Monday.
That is, Bank of America faces the same challenges of all banks, but not more than it has workable solutions for.
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