#1 Dow Stock: Bank of America
YTD Gain: 45%
Yes, that dog with fleas Bank of America (NYSE:BAC) is the top performer in the Dow for the first half of the year. No, the company hasn’t raised its dividend from a penny per quarter — and didn’t even bother asking the Fed permission for a bump in 2012 after the central bank’s BofA dividend denial. No, the weight of bad mortgage debt isn’t completely off the books. No, the tea leaves of future regulatory impact haven’t gotten any easier to read.
But apparently, investors still thought the negativity was overdone.
After all, even after the run-up, Bank of America is trading at around 60% of its tangible book value. That’s still a decent cushion, and previous valuations apparently seemed too cheap to pass up.
However, it’s worth noting that BAC does 200 million shares a day on average — mostly via computers doing their high-frequency trading tactics. In fact, 5% to 10% of daily NYSE volume is on Bank of America trades alone! We can ascribe all the logic we like to the run-up of this top Dow stock, but the aid of algorithms has to be acknowledged.