In a significant move by one of its largest shareholders, Berkshire Hathaway Inc . (NYSE:BRKa) has sold a substantial portion of its holdings in Bank of America Corp (NYSE:NYSE:BAC). The transactions, which took place over a series of days, resulted in the sale of shares totaling approximately $337.86 million.
The sale was conducted in multiple transactions at prices ranging from $39.3994 to $39.6141 per share. On September 30, 2024, Berkshire Hathaway sold 4,985,553 shares at a weighted average price of $39.6141. The following day, on October 1, 2024, the company sold another 1,839,871 shares at an average price of $39.3994. The sales continued on October 2, 2024, with 1,722,523 shares sold at an average price of $39.4036.
After these sales, Berkshire Hathaway's remaining holding in Bank of America consists of a substantial 794,120,913 shares. The shares are owned by a number of Berkshire Hathaway's subsidiaries, including insurance and reinsurance firms.
The transactions were signed off by Warren E. Buffett, who, as the controlling stockholder of Berkshire Hathaway, may be deemed to beneficially own the shares owned by its subsidiaries. However, Mr. Buffett has disclaimed beneficial ownership of these securities except to the extent of his pecuniary interest therein.
Investors and analysts closely monitor such sales by major shareholders, as they may signal changes in the shareholder's view of the bank's future prospects or simply adjustments to their investment portfolio. Bank of America, with its headquarters in Charlotte, North Carolina, remains one of the largest financial institutions in the United States.
This latest move by Berkshire Hathaway is part of the normal course of its investment management activities. The company's strategy has always been to make adjustments to its holdings as it sees fit, based on a variety of factors including market conditions and investment goals.
In other recent news, Bank of America has seen a series of developments. Evercore ISI maintained its Outperform rating on the bank, predicting a 3.4% growth in net interest income (NII) in 2025, which is less than the consensus estimate of 5.4%. The firm also anticipates a fourth quarter NII of approximately $14.9 billion for 2025. Simultaneously, Deutsche Bank upgraded Bank of America's stock from Hold to Buy, while Piper Sandler maintained a neutral rating.
The bank's CFO, Alastair Borthwick, expressed optimism about the Federal Reserve's efforts in tackling inflation in the United States, noting significant progress. This follows the U.S. central bank's decision to cut interest rates by 50 basis points, a move seen as supportive of economic growth.
In personnel news, David Dowd was appointed as the new president of Bank of America's Asheville market. This aligns with the company's focus on enhancing local community engagement and economic mobility. Dowd's role will involve leading the bank's local integration and community engagement efforts, and growing the bank's market share in the region.
These are recent developments and part of a broader context of activity surrounding Bank of America. It's important to note that these updates come from analyst notes and company announcements, and should not be taken as a comprehensive view of the company's status.
InvestingPro Insights
To provide additional context to Berkshire Hathaway's recent sale of Bank of America shares, it's worth noting some key financial metrics and insights from InvestingPro.
Bank of America currently boasts a market capitalization of $303.79 billion, reflecting its position as a major player in the financial sector. The bank's P/E ratio stands at 13.64, suggesting a relatively modest valuation compared to some of its peers.
One InvestingPro Tip highlights that Bank of America has maintained dividend payments for 54 consecutive years, demonstrating a strong commitment to shareholder returns. This consistency aligns with Berkshire Hathaway's preference for stable, dividend-paying stocks. Additionally, the bank has raised its dividend for 10 consecutive years, further underlining its financial stability and growth.
However, another InvestingPro Tip indicates that 6 analysts have revised their earnings downwards for the upcoming period. This could potentially explain Berkshire Hathaway's decision to trim its position, as the company may be anticipating some headwinds for the banking sector.
Despite these analyst revisions, Bank of America remains profitable, with a return on assets of 0.77% for the last twelve months as of Q2 2024. The bank's revenue for the same period stood at $94.76 billion, although it experienced a slight revenue decline of 1.75%.
For investors seeking a more comprehensive analysis, InvestingPro offers additional tips and insights beyond those mentioned here. In fact, there are 8 more InvestingPro Tips available for Bank of America, providing a deeper understanding of the company's financial health and market position.
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