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Low Valuation Could Make Bank of America an Attractive Stock Pick

Andrew Brunton
Low Valuation Could Make Bank of America an Attractive Stock Pick

The PB (price-to-book) value ratio is considered the best multiple for valuing stocks that have a significant amount of liquid tangible assets in their books, such as insurance, finance, and banking companies. A PB multiple of less than one signifies that the stock is undervalued and thus considered a good buy. Bank of America (BAC) stock has risen ~5% YTD (year-to-date), outperforming the Financial Select Sector SPDR ETF’s (XLF) return of 1.3%.