Bank on Bank of America (BAC)

"Bank of America (NYSE: BAC) should be a primary beneficiary of the government's 'bailout'," says Mark Skousen. The editor of The High Income Alert notes, "The credit crunch in real estate has taken its toll on Wall Street, but it is clear to me that the Fed and central banks are making a concerted effort to bail out the major financial players."

He explains, "Bank of America is one of the largest banks in the U.S. BAC has more than $360 billion in cash right now, as well as plenty of funds to continue its expansion plans in banking, credit cards, and mortgages. Its profit margins exceed 30%, its revenues are rising at a 15% rate and its earnings were up in the most recent quarter by 5% to $21 billion."

In addition, Skousen notes, BAC has a rising dividend strategy and currently pays a 5.4% dividend yield -- one of the highest among the premier banks. He suggests, "BAC also is cheap, since it now is selling at only nine times next year's earnings. The stock is off 11% this year, making it a bargain."

If that isn't enough, he adds, Warren Buffett's Berkshire Hathaway is buying more shares of Bank of America, and for good reason. He concludes, "Let's do the same. Buy BAC and set a protective stop of $40. For those willing to take greater risks, consider buying the January $55 calls."

Each day, Steven Halpern's TheStockAdvisors.com features the latest investment ideas and market commentary from the financial newsletter community.