Tomahawk, WI 12/02/2013 (BasicsMedia) – Bank of America Corp (NYSE:BAC) can baffle. The financial institution billed as the second largest bank in the U.S. in asset value behind JPMorgan Chase (NYSE:JPM) has had impressive run so far in the year. However, the bank is also facing serious one-time items issues in the name of toxic mortgage-backed securities. As a result of these bad mortgages, the bank has been bleeding billions of dollars in settlements.

Loss of money at this critical time when the financial sector is still recovering from the effect of the financial crisis can cause fear among investors. However, even in this seemingly baffling environment, the true Bank of America Corp (NYSE:BAC) is never too hard to identify. They say in Wall Street that to get the most of a bank investment, go for it when it is trading at half the book value.  Then hold it and sell when it begins trading at double the book value. Now for BAC, the financial institution’s book value is about $20.80 per share while the stock is trading around $15 per share. In this case, BAC is a buy candidate as it trades slightly above half the book value which makes it a moderately valued stock.

Looking at how the company has put its best foot forward to get clear off the large one-time items like the mortgage litigation issues, it’s all but clear that the worst is now behind Bank of America Corp (NYSE:BAC). Also, that the bank is reducing its operating expenses in the category of workforce for which it hopes to save $1 billion in the next three years is expected to put it in solid financial position.

The environment of rising interest rates is also conducing for banks and this makes BAC a good investment candidate stock as its interest income column is expected to witness some growth. In sum, there are reasonable grounds to believe that Bank of America Corp (NYSE:BAC) is undervalued as at present.

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