In a recent series of transactions, Berkshire Hathaway Inc . (NYSE:BRKa), the conglomerate headed by famed investor Warren E. Buffett, has sold a significant portion of its stake in Bank of America Corp. (NYSE:NYSE:BAC). The sales, which took place over three days, resulted in the disposal of a total of $862,670,637 worth of the banking giant's stock.
The transactions began on September 20, 2024, when Berkshire Hathaway sold 10,247,961 shares at an average price of $40.3633 per share. This was followed by the sale of 4,941,403 shares on September 23 at an average price of $39.9444, and a final sale of 6,371,845 shares on September 24 at an average price of $39.4937. The prices for the shares sold ranged from $39.4937 to $40.3633 across the different transactions.
After these sales, Berkshire Hathaway's remaining stake in Bank of America consists of 814,347,226 shares. It's important to note that the shares sold were held by various subsidiaries of Berkshire Hathaway, as outlined in the footnotes of the SEC filing.
These subsidiaries include a wide array of insurance and financial companies under the Berkshire umbrella, such as Government Employees Insurance Company (GEICO) and National Indemnity Company, among others. The nature of the ownership is indicated as indirect, and Warren E. Buffett, as the controlling shareholder of Berkshire Hathaway, is deemed to beneficially own the shares.
The SEC filing includes a commitment by the reporting persons to provide full information regarding the number of shares sold at each separate price within the ranges noted upon request by Bank of America, any security holder of Bank of America, or the staff of the Securities and Exchange Commission.
The reported transactions were signed off by Warren E. Buffett himself, representing both his personal holdings and those of the other reporting persons under Berkshire Hathaway Inc.
In other recent news, Bank of America has appointed David Dowd as the new president of its Asheville market, highlighting the company's focus on leadership that can support local economies. Dowd's role will include growing the bank's market share and deepening client relationships in the region. In other developments, a Federal Reserve decision to cut interest rates has been welcomed by the banking sector, including Bank of America, as it is anticipated to ease the financial burden on borrowers and lower deposit costs for banks.
Berkshire Hathaway, led by Warren Buffett, has sold a significant portion of its stake in Bank of America, generating approximately $7 billion since mid-July, yet remains the bank's largest shareholder. Analysts from Piper Sandler have maintained a neutral rating on the bank's shares, while Deutsche Bank upgraded the bank's stock from Hold to Buy, citing potential for revenue growth.
These recent developments reflect the ongoing changes in Bank of America's leadership, shareholder composition, and the broader financial environment.
InvestingPro Insights
Bank of America Corp. (NYSE:BAC) continues to navigate the financial landscape with a blend of stability and strategic moves. A key highlight from InvestingPro insights is the company's commendable track record of raising its dividend for 10 consecutive years, signaling a commitment to returning value to shareholders. This is further underscored by the fact that Bank of America has maintained dividend payments for over half a century, a testament to its financial resilience and prudent management.
InvestingPro data shows a market capitalization of $306.58 billion, with a Price/Earnings (P/E) ratio standing at 13.76. This figure is even more attractive when considering the adjusted P/E ratio for the last twelve months as of Q2 2024, which is at 11.79, indicating potential undervaluation relative to earnings. Moreover, the Price to Book (P/B) ratio during the same period is at a modest 1.15, suggesting that the stock could be trading at a price close to its net asset value.
While Bank of America has experienced a slight revenue decline of 1.75% over the last twelve months as of Q2 2024, InvestingPro Tips highlight that analysts predict the company will remain profitable this year, having already been profitable over the last twelve months. This is a crucial aspect for investors seeking stability and growth in the Banks industry, where Bank of America is a prominent player.
For those interested in further insights and tips, InvestingPro offers additional guidance on Bank of America, with a total of 6 InvestingPro Tips available at https://www.investing.com/pro/BAC. These tips provide a deeper analysis that could help investors make more informed decisions.
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