Stock Traders Purchase Large Volume of Bank of America Call Options (NYSE:BAC)

Key Points

• Bank of America saw a significant increase in call options trading, with investors purchasing 383,914 call options—a 135% rise from the average volume of 163,130 options.
• Insider James P. Demare sold 148,391 shares of Bank of America, which indicates a 39.91% decrease in their ownership, valued at approximately $10.2 million post-sale.
• The company announced a $40 billion share repurchase plan and a quarterly dividend increase to $0.28 per share, reflecting its confidence in the stock's valuation.

Bank of America Corporation (NYSE:BAC) was the recipient of unusually large options trading on Thursday. Stock investors purchased 383,914 call options on the company. Thisisanincreaseof135% compared to the average volume of 163,130 call options.

Insider Buying and Selling at Bank of America

In related news, insider James P. Demare sold 148,391 shares of the stock in a transaction that occurred on Friday, August 1st. The stock was sold at an average price of $45.57, for a total value of $6,762,177.87. Following the completion of the transaction, the insider directly owned 223,407 shares in the company, valued at approximately $10,180,656.99. This represents a 39.91% decrease in their ownership of the stock. The sale was disclosed in a legal filing with the SEC, which is accessible through this link. 0.30% of the stock is currently owned by company insiders.

Hedge Funds Weigh In On Bank of America

A number of institutional investors have recently added to or reduced their stakes in BAC. Geode Capital Management LLC grew its position in shares of Bank of America by 0.3% during the second quarter. Geode Capital Management LLC now owns 148,176,755 shares of the financial services provider's stock worth $6,982,863,000 after buying an additional 403,652 shares in the last quarter. Norges Bank acquired a new position in shares of Bank of America in the 2nd quarter worth approximately $5,091,641,000. Bank of New York Mellon Corp lifted its holdings in shares of Bank of America by 1.3% in the 1st quarter. Bank of New York Mellon Corp now owns 60,417,407 shares of the financial services provider's stock worth $2,521,218,000 after purchasing an additional 803,570 shares during the last quarter. Fisher Asset Management LLC lifted its holdings in shares of Bank of America by 5.2% in the 2nd quarter. Fisher Asset Management LLC now owns 51,405,673 shares of the financial services provider's stock worth $2,432,516,000 after purchasing an additional 2,557,943 shares during the last quarter. Finally, Deutsche Bank AG lifted its holdings in shares of Bank of America by 45.1% in the 1st quarter. Deutsche Bank AG now owns 48,112,090 shares of the financial services provider's stock worth $2,007,718,000 after purchasing an additional 14,960,086 shares during the last quarter. Institutional investors and hedge funds own 70.71% of the company's stock.

Wall Street Analysts Forecast Growth

A number of equities analysts recently commented on BAC shares. Baird R W cut Bank of America from a "strong-buy" rating to a "hold" rating in a report on Friday, June 27th. Robert W. Baird reaffirmed a "neutral" rating and issued a $52.00 price target on shares of Bank of America in a research report on Friday, June 27th. Phillip Securities lowered Bank of America from a "strong-buy" rating to a "moderate buy" rating in a research report on Friday, July 25th. Oppenheimer increased their price target on Bank of America from $55.00 to $57.00 and gave the company an "outperform" rating in a research report on Wednesday, July 30th. Finally, Citigroup increased their price objective on Bank of America from $50.00 to $54.00 and gave the company a "buy" rating in a report on Thursday, June 26th. Sixteen analysts have rated the stock with a Buy rating and five have issued a Hold rating to the stock. Based on data from MarketBeat.com, Bank of America currently has a consensus rating of "Moderate Buy" and an average price target of $50.39.

Bank of America Price Performance

BAC traded up $0.58 during trading on Thursday, reaching $50.64. 27,140,351 shares of the stock were exchanged, compared to its average volume of 41,869,313. The business's 50 day moving average price is $47.83 and its two-hundred day moving average price is $44.05. The company has a debt-to-equity ratio of 1.14, a current ratio of 0.80 and a quick ratio of 0.79. The company has a market capitalization of $375.05 billion, a price-to-earnings ratio of 14.81, a P/E/G ratio of 1.97 and a beta of 1.34. Bank of America has a 1 year low of $33.06 and a 1 year high of $50.92.

Bank of America (NYSE:BAC - Get Free Report) last released its earnings results on Wednesday, July 16th. The financial services provider reported $0.89 EPS for the quarter, beating the consensus estimate of $0.86 by $0.03. The firm had revenue of ($22,273.00) million during the quarter, compared to analyst estimates of $26.79 billion. Bank of America had a return on equity of 10.25% and a net margin of 14.81%.The business's quarterly revenue was up 4.3% compared to the same quarter last year. During the same period in the prior year, the firm posted $0.83 earnings per share. As a group, equities research analysts anticipate that Bank of America will post 3.7 earnings per share for the current year.

Bank of America announced that its board has initiated a share repurchase plan on Wednesday, July 23rd that authorizes the company to repurchase $40.00 billion in shares. This repurchase authorization authorizes the financial services provider to buy up to 11.1% of its stock through open market purchases. Stock repurchase plans are typically an indication that the company's board believes its shares are undervalued.

Bank of America Increases Dividend

The business also recently announced a quarterly dividend, which will be paid on Friday, September 26th. Stockholders of record on Friday, September 5th will be paid a $0.28 dividend. This represents a $1.12 dividend on an annualized basis and a dividend yield of 2.2%. This is an increase from Bank of America's previous quarterly dividend of $0.26. The ex-dividend date is Friday, September 5th. Bank of America's payout ratio is 30.41%.

About Bank of America

Bank of America Corporation, through its subsidiaries, provides banking and financial products and services for individual consumers, small and middle-market businesses, institutional investors, large corporations, and governments worldwide. It operates in four segments: Consumer Banking, Global Wealth & Investment Management (GWIM), Global Banking, and Global Markets.

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