Bank of America (NYSE: BAC) and other stocks in the financial sector could see significant increases in value during the next year, said Dan Frascarelli, manager of the manager of the Lord Abbett Classic Stock Fund in a recent interview on TheStreet.com.
Frascarelli’s fund earned a four star rating from Morningstar and has returned over 27” during the last 12 months, meeting many of its peers. The Street says that the fund had outperformed 96% of competing funds. Frascarelli’s market strategy is to “adjust the portfolio to market conditions by tilting its investing style toward growth or value.”
Frascarelli believes that financial stocks will see significant gains in 2010 because of the recovering economy and because banks have significantly cut their costs in hopes of gaining some level of profitability. Frascarelli commented that corporate profits have held up much better than some have expected.
Bank of America is seen by Frascarelli as a strong value investment. He believes that Bank of America has set enough aside to take care of most of the losses from their loan portfolios. He believes that consumer credit losses will begin to subside in 2010 and 2011, a strong positive for financial institutions. Frascarelli believes Bank of America’s share price will rise dramatically and reach about $3.00 per share as losses from consumer credit subside.
