Berkshire Hathaway Inc . (NYSE:BRKa), the conglomerate led by renowned investor Warren E. Buffett, has recently sold a significant portion of its stake in Bank of America Corp (NYSE:NYSE:BAC). The sales, which occurred over several transactions, amounted to a total of approximately $1.48 billion.
The transactions, which took place between July 17 and July 19, were executed at prices ranging from $43.13 to $44.07 per share. On July 17, Berkshire Hathaway sold 12,690,693 shares at a weighted average price of $44.07. The following day, the company disposed of 7,037,367 shares at a weighted average price of $43.28 and another 1,871,060 shares at $44.07. Finally, on July 19, an additional 12,291,807 shares were sold at an average price of $43.13 per share.
After these sales, Berkshire Hathaway's remaining stake in Bank of America consists of 998,961,079 shares. It should be noted that the shares are owned by various subsidiaries of Berkshire Hathaway, as detailed in the footnotes of the SEC filing. The subsidiaries range from insurance companies to financial institutions, each holding a portion of the total shares without double counting within the conglomerate's complex ownership structure.
Warren E. Buffett, as the controlling shareholder of Berkshire Hathaway, is considered to have a pecuniary interest in the shares owned by these subsidiaries. However, he disclaims beneficial ownership of the reported securities except to the extent of his pecuniary interest therein.
Investors and followers of Berkshire Hathaway often keep a close eye on the company's buy and sell activities as an indicator of Buffett's market outlook. The sale of Bank of America stock marks a notable adjustment in Berkshire's portfolio, as the banking giant has been one of its significant holdings.
For more detailed information regarding the number of shares sold at each separate price within the reported ranges, the reporting persons have committed to providing full information upon request to Bank of America, its security holders, or the staff of the Securities and Exchange Commission.
The recent transactions have been duly reported in accordance with SEC regulations, and the filing includes an undertaking by the reporting persons to provide further details about the sales as needed.
In other recent news, Bank of America has experienced a series of adjustments to its stock price targets following robust second-quarter financial performance. Phillip Securities downgraded the bank's stock from a Buy to a Neutral rating but raised its fiscal year 2024 earnings estimate by 8%, citing increased net interest income and a rise in fee income from wealth management and investment banking services. BMO Capital Markets also revised its forward estimates upwards by as much as 2%, attributing this to higher-than-anticipated non-interest income and an expected uptick in share repurchases.
Meanwhile, Evercore ISI increased its price target for Bank of America shares, buoyed by investor optimism regarding the bank's net interest income expansion prospects for 2025. The bank's management has indicated expectations for net interest income growth, driven by modest increases in loans and deposits, improved net interest margin from securities reinvestment, controlled expense growth, and robust capital returns.
In addition to these, Baird maintained a Neutral rating on Bank of America but increased the price target following the bank's reported second-quarter earnings per share of $0.90, surpassing consensus estimates. The bank's quarterly performance exceeded forecasts, attributed to robust fee income.
In recent developments, Bank of America has been involved in a lawsuit over alleged overcharging for "odd-lot" corporate bond trades and has amended its bylaws to clarify the process for holding shareholder meetings remotely. Despite these challenges, the bank's diversified business model and robust earnings have been recognized by analysts, who remain optimistic about its future performance.
InvestingPro Insights
In light of Berkshire Hathaway's recent sell-off of Bank of America stock, investors may find the following metrics and tips from InvestingPro valuable for understanding the current financial landscape of the bank. Bank of America, with a significant market capitalization of $334.16 billion, remains a heavyweight in the banking sector. Despite the recent divestment by Berkshire Hathaway, Bank of America has shown robust performance in certain areas. The company's dividend growth over the last twelve months is notable, with a 9.09% increase, signaling a commitment to returning value to shareholders. This is further underscored by the fact that Bank of America has not only maintained but also raised its dividend for 54 consecutive years, a testament to its financial stability and shareholder-friendly policies.
InvestingPro Tips highlight that Bank of America has been trading near its 52-week high, with the price at the previous close standing at $43.01. This is supported by a strong return over the last three months, with a 16.75% total price return, and an impressive 34.9% increase over the last six months. Additionally, 8 analysts have revised their earnings upwards for the upcoming period, which may indicate a positive outlook on the company's future performance.
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