So says CNBC's Jim Cramer on today's "Squawk on the Street". Last week, the company reported a 70% increase in its second quarter profits to $3.6 billion. However, revenues were up only 3% to $22.9 billion.
How did the company get such a jump on profits while revenues grew only slightly? By firing people and cutting other costs, of course. The bank sent pink slips to 7% of its employees – 18,300 people. It also has closed 260 branches in the past twelve months, bringing its total to roughly 5,300.
On the top line, one of Bank of America's big growth businesses these days is mortgages. That segment has grown 41% since last year to $27 billion loaned this quarter.
In the past month alone, Bank of America's stock is up 21%. Over the past twelve months, share prices have more than doubled. In general, there's a resurging financial sector. Shares in the Financial Select Sector SPDR (the XLF), are up almost 27% this year and 46% over the last twelve months.
Bank of America's revenue and earnings growth reflects the trend in the industry – a decent top-line growth with a blow-out bottom line growth due to cost cutting.
According to statistics compiled by Thomson Reuters I/B/E/S, financial services companies that have reported so far this quarter are leading the pack compared to other sectors in the S&P 500. Financials have shown a revenue growth rate of 6.4%, the highest of all sectors to be sure, but, its earnings growth of 26% knocks it out of the park. The next highest sector earnings growth rate is 5.9% for consumer discretionary stocks.
So, should you want Bank of America stock going forward, too?
We ask Talking Numbers contributors Richard Ross, Global Technical Strategist at Auerbach Grayson, and Enis Taner, Global Macro Editor at RiskReversal.com, to look at the charts and fundamentals on whether you can bank on Bank of America.
To see Ross and Taner analyze Bank of America, watch the video above.