Coming out of the financial crisis many�pessimists�believed that consumers would flee the big banks in droves, but the reality has been far more muted. In fact, we're continuing to see deposits flow into and grow at the big banks. This negative sentiment has come with correspondingly low valuations at the big institutions as well.
However, being cheap doesn't necessarily make them a buy. As the video below indicates, it's the quality of the institution that matters much more.
Does the biggest of the big banks,�Bank of America's (NYSE: BAC ) make the grade?�With significant challenges still ahead, it's critical to have�a solid understanding of this megabank�before adding it to your portfolio.
In The Motley Fool's premium research report on B of A, analysts Anand Chokkavelu, CFA, and Matt Koppenheffer, Financials bureau chief, lift the veil on the bank's operations, including detailing three reasons to buy and three reasons to sell. Click here now to claim your copy.
Top 5 Cheap Companies To Watch For 2014: Rent-A-Center Inc.(RCII)
Rent-A-Center, Inc., together with its subsidiaries, primarily engages in leasing household durable goods to customers on a rent-to-own basis. The company?s stores offer durable products, such as consumer electronics, appliances, computers, and furniture and accessories under flexible rental purchase agreements that allow the customer to obtain ownership of the merchandise at the conclusion of an agreed upon rental period. It also provides merchandise on an installment sales basis in its stores. As of December 31, 2010, the company operated 3,008 company-owned stores in the United States, and in Canada, Puerto Rico, and Mexico, including 42 retail installment sales stores under the names ?Get It Now? and ?Home Choice?; and 18 rent-to-own stores located in Canada under the ?Rent-A-Centre? name. It also operates 209 franchised rent-to-own stores in 32 states under the ColorTyme trade name; and 384 kiosk locations under the ?RAC Acceptance? model. In addition, the company, th rough its ColorTyme?s franchised stores, offers custom rims and tires for sale or rental under the trade names ?RimTyme? or ?ColorTyme Custom Wheels?. Rent-A-Center, Inc. was founded in 1986 and is headquartered in Plano, Texas.
Advisors' Opinion:- [By Chris Stuart]
Rent-A-Center(RCII), the largest rent-to-own operator in the U.S., rents furniture and electronics to low- to middle-income customers.
The company has struggled in the past three months, underperforming its closest competitor, Aaron's Rents(AAN), by over 25%. While Aaron's has executed flawlessly, Rent-A-Center has not, as the company missed earnings estimates. Management blamed the first-quarter fallout on poor weather conditions in February and limited availability of refund-anticipation loans for consumers. Despite the hiccup, management has stuck to its 2011 guidance of $2.90 to $3.10 in EPS, equating to revenue growth of 5% to 7% and earnings-per-share growth of 3% to 10%.
Key initiatives to boost growth, such as RAC Acceptance (kiosks in third-party stores that arrange rent-to-own programs) are in place. Management has done a good job of managing its debt position and recently boosted the dividend by 167% (now at a 2.2% yield). If management can achieve $3 in EPS for the full year, the stock looks cheap, trading at just 9.7 times earnings (a discount to 15 times P/E for Aaron's). TheStreet Ratings has a $41 price target on shares of Rent-A-Center.
Top 5 Cheap Companies To Watch For 2014: Capstone Turbine Corporation(CPST)
Capstone Turbine Corporation develops, manufactures, markets, and services turbine generator sets and related parts for use in stationary distributed power generation applications. Its stationary distributed power generation applications include cogeneration combined heat and power (CHP), integrated (CHP), resource recovery, and secure power, as well as combined cooling, heat, and power; and its products are used as battery charging generators for hybrid electric vehicle applications. The company primarily offers microturbine units, subassemblies, and components. It also provides various accessories, including rotary gas compressors with digital controls, heat recovery modules for CHP applications, dual mode controllers that allow automatic transition between grid connect and stand-alone modes, batteries with digital controls for stand-alone/dual-mode operations, power servers for multipacked installations, and protocol converters for Internet access, as well as frames, ex haust ducting, and installation hardware. Further, it remanufactures microturbine engines; and provides after-market parts and services, scheduled and unscheduled maintenance, and factory and on-site training services. The company?s microturbines can be fueled by various sources, including natural gas, propane, sour gas, landfill or digester gas, kerosene, diesel, and biodiesel. It primarily sells its products directly to end users, as well as through distributors in North America, Asia, Australia, Europe, the Russian Federation, and South America. Capstone Turbine Corporation was founded in 1988 and is based in Chatsworth, California.
Advisors' Opinion:- [By Louis Navellier]
Capstone Turbine Corp. (NASDAQ: CPST) develops, manufactures, markets and services microturbine technology solutions. The stock has gained 88% year to date, compared to just 6% for the S&P 500 Index. It should also be mentioned that CPST posted quarterly revenue growth of 51%, year over year, last quarter.
Top Stocks To Own Right Now: Advance Auto Parts Inc(AAP)
Advance Auto Parts, Inc., through its subsidiaries, operates as a retailer of automotive aftermarket parts, accessories, batteries, and maintenance items. It operates in two segments, Advance Auto Parts (AAP) and Autopart International (AI). The AAP segment operates stores, which primarily offer auto parts, including alternators, batteries, chassis parts, clutches, engines and engine parts, radiators, starters, transmissions, and water pumps; accessories comprising floor mats, mirrors, vent shades, MP3 and cell phone accessories, and seat and steering wheel covers; chemicals consisting of antifreeze, freon, fuel additives, and car washes and waxes; and oil and other automotive petroleum products. This segment also provides battery and wiper installation, battery charging, check engine light reading, electrical system testing, video clinics and project brochures, loaner tool programs, and oil and battery recycling services; and sells its products through online. The AI segm ent operates stores that offer replacement parts for domestic and imported cars, and light trucks to customers in northeast and mid-Atlantic regions, as well as to warehouse distributors and jobbers in North America. As of January 1, 2011, the company operated 3,369 AAP stores, including 3,343 stores located in the northeastern, southeastern, and Midwestern regions of the United States under the Advance Auto Parts and Advance Discount Auto Parts trade names; 26 stores situated in Puerto Rico and the Virgin Islands under the Advance Auto Parts and Western Auto trade names; and 194 stores under the Autopart International trade name in the United States. It serves do-it-yourself, do-it-for-me, or commercial customers. The company was founded in 1929 and is based in Roanoke, Virginia.
Advisors' Opinion:- [By Vatalyst]
Advance Auto Parts (AAP) is the second largest parts retailer in the U.S. The common stock currently trades at a price to earnings ratio sits at 12.5, below its historical average of 16 and industry average of 15.7.
Typical of Wall Street short term thinking, the madding crowd fled this stock in May, due to weak first quarter 2011 comparable store sales gain of 1.4% versus an 8.9% gain during December 2010. Price to book ratio is 4.57 whilst price to cash flow sits at 7.70, well below the industry average of 11.2.
Top 5 Cheap Companies To Watch For 2014: Bank of America Corporation(BAC)
Bank of America Corporation, a financial holding company, provides banking and nonbanking financial services and products to individuals, small- and middle-market businesses, large corporations, and governments in the United States and internationally. The company?s Deposits segment generates savings accounts, money market savings accounts, certificate of deposits, and checking accounts; and Global Card Services segment provides the U.S. consumer and business card, consumer lending, international card and debit card services. Its Home Loans & Insurance segment offers consumer real estate products and services, including mortgage loans, reverse mortgages, home equity lines of credit, and home equity loans. It also provides property, disability, and credit insurance. The company?s Global Commercial Banking segment offers lending products, including commercial loans and commitment facilities, real estate lending, leasing, trade finance, short-term credit, asset-based lending, and indirect consumer loans; and capital management and treasury solutions, such as treasury management, foreign exchange, and short-term investing options. Its Global Banking & Markets segment provides financial products, advisory services, settlement, and custody services; debt and equity underwriting and distribution, merger-related advisory services, and risk management products; and integrated working capital management and treasury solutions. The company?s Global Wealth & Investment Management segment offers investment and brokerage services, estate management, financial planning services, fiduciary management, credit and banking expertise, and asset management products. Bank of America Corporation serves customers through a network of approximately 5,900 banking centers and 18,000 automated teller machines. It was formerly known as NationsBank Corporation and changed its name on October 1, 1998. Bank of America Corporation was founded in 1874 and is based in Charlott e, North Carolina.
Advisors' Opinion:- [By Dan Freed]
JPMorgan rates Bank of America as an "Overweight," citing passing of the Fed stress test as confirmation of adequate an capital base and "recent progress on mortgage related issues" and cost restructuring. In the near term, Bank of America should benefit from improved trends in trading, the report argues.
The report added that BofA's valuation remains "attractive" at 0.7x tangible book.
Top 5 Cheap Companies To Watch For 2014: TranSwitch Corporation(TXCC)
Transwitch Corporation designs, develops, and supplies semiconductor and intellectual property solutions for voice, data, and video communications equipment. The company provides integrated multi-core network processor system-on-a-chip (SoC) and software solutions for fixed, 3G and 4G mobile, VoIP, and multimedia infrastructures. It offers converged network infrastructure products, including infrastructure VoIP processors comprising Entropia series of processors for wire-line and wireless carrier equipment; EoS/EoPDH mappers and framers for formats and data speeds in the access portion of the network; tributary switches that enable traffic to be switched or re-arranged; and carrier Ethernet solutions consisting of Ethernet controllers and switches, as well as circuit emulation and clock recovery devices. The company also provides FTTx protocol processors, such as mustang, a system-on-chip solution for EPON optical network unit equipment; COLT processor, a system-on-chip so lution for the optical line terminator equipment; and Diplomat-ONT product, an integrated SoC solution for GPON ONU applications, as well as access VoIP processors and access controllers. In addition, it offers broadband customer premises equipment, including multi-service communications processors comprising Atlanta processor, a multi-service SoC for customer premises equipment that supports toll-quality telephone voice, fax, and routing functionality; and HDMI, displayport, HDP, and Ethernet IP cores for consumer electronics, home network equipment, and industrial and automotive applications. The company serves public network systems OEMs, WAN and LAN equipment OEMs, Internet-oriented OEMs, and communications test and performance measurement equipment OEMs, as well as government, university, and private laboratories. It sells its products through direct sales force, independent distributors, and sales representatives. The company was founded in 1988 and is headquartered in Shelton, Connecticut.
Advisors' Opinion:- [By Michael Brush]
If you find yourself craving more high-definition video on your smartphone or tablet computer or if you've been checking out 3D televisions -- the next big trend -- you already know why TranSwitch (TXCC) stock should be a winner over the next few years.
Once a techmania darling, trading at more than $500 a share, TranSwitch crashed and burned along with so many other Internet stocks. It has been all but left for dead since. Wall Street analysts are predicting the stock will actually have fallen to $2 a year from now, from recent levels of around $2.60, according to Thomson Reuters.
What they're missing is that TranSwitch has revamped its chip offerings so they support high-definition video connections in TVs, PC and game monitors, smartphones, tablets and video cameras. This exposes the company to some big consumer trends. Another new product line supports gear that connects homes, offices and smartphones to the Internet.
Those analysts and other investors don't put much faith in these new products. So why should you? Because the right kinds of insiders have been accumulating stock. Many of the new products are scheduled to hit the market over the next three months and generate meaningful sales by the fourth quarter. So now is the time to buy.
Of course, we don't know for sure that TranSwitch's new products will catch on. But behind the scenes, they've been licensed by the likes of Intel (INTC), International Business Machines (IBM), Texas Instruments (TXN) and Analog Devices (ADI), Ted Chung, the TranSwitch vice president of global business development, tells me. That suggests TranSwitch may work its way into the Apple (AAPL) iGadget ecosystem, says Northland Capital Markets analyst Richard Shannon. That would be a game-changer for tiny TranSwitch, but the markets for its new products are so big that it probably can win even without such an advantage
- [By Michael Brush]
If you find yourself craving more high-definition video on your smartphone or tablet computer or if you've been checking out 3D televisions -- the next big trend -- you already know why TranSwitch (TXCC) stock should be a winner over the next few years.
Once a techmania darling, trading at more than $500 a share, TranSwitch crashed and burned along with so many other Internet stocks. It has been all but left for dead since. Wall Street analysts are predicting the stock will actually have fallen to $2 a year from now, from recent levels of around $2.60, according to Thomson Reuters.
What they're missing is that TranSwitch has revamped its chip offerings so they support high-definition video connections in TVs, PC and game monitors, smartphones, tablets and video cameras. This exposes the company to some big consumer trends. Another new product line supports gear that connects homes, offices and smartphones to the Internet.
Those analysts and other investors don't put much faith in these new products. So why should you? Because the right kinds of insiders have been accumulating stock. Many of the new products are scheduled to hit the market over the next three months and generate meaningful sales by the fourth quarter. So now is the time to buy.
Of course, we don't know for sure that TranSwitch's new products will catch on. But behind the scenes, they've been licensed by the likes of Intel (INTC), International Business Machines (IBM), Texas Instruments (TXN) and Analog Devices (ADI), Ted Chung, the TranSwitch vice president of global business development, tells me. That suggests TranSwitch may work its way into the Apple (AAPL) iGadget ecosystem, says Northland Capital Markets analyst Richard Shannon. That would be a game-changer for tiny TranSwitch, but the markets for its new products are so big that it probably can win even without such an advantage.
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