Many sectors of the market trend towards an oligopoly, where a small number of players will dominate the market. One such example is the media industry, where six large corporations control about 90 percent of the news today.
Other sectors also have this factor at work. Smaller companies end up being bought out by larger companies, and the largest companies tend to jockey for position based on their ability to grow.
For example, in the banking space right now, only 5 major banks control the overwhelming amount of the industry, even though there are hundreds of players. Within that space, bank earnings this year have shown relatively strong results for Bank of America (BAC).
The company saw a strong rise in lending activity, and beat earnings expectations handily, as other big banks were hit by slowing M&A deal fees and other Wall Street, not Main Street, finance.
Action to take: Shares of Bank of America are still slightly down over the last year. But trading at 12 times forward earnings, and yielding over 2.2 percent right now, shares look attractive, even with interest rates on the rise.
For traders, the September $40 calls, last going for about $2.45, offer traders mid double-digit returns in the coming months, especially if some of the current market fears centering around interest rates and inflation start to fade.
Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any of the companies mentioned in this article.