Bank of America (NYSE:BAC)

The US banks have had a large role in causing this recession. But now that the economy is recovering and interest rates are low, banks are poised to lead us out of the hole. Bank of America (NYSE:BAC) is the most undervalued of the largest banks in the US. You may think that you missed the move from the March lows, but we’re looking to where BAC is going rather than where it’s been. The stock is still down 50% from merely a year ago when it had already been hit hard. Also notice the high volume on the stock as it continues its uptrend. This shows much strength in the rising stock price.

The stock is rebounding off its moving average. A year ago, buying the stock at $17 and change would have seemed like a steal. But the bank was knocked down to lows far beyond that. Now the fundamentals are better, and the $17 buy is an excellent purchase. The company has equity of $255B but is trading with a market cap of barely $150B, when most of its peers are trading at or higher than their shareholders’ equity.

With record low interest rates and a bottom in housing, the bank can start paying off TARP money and start making money for investors. The stock could reach $22 by year end, and over $30 in 2010.