Berkshire Hathaway Sells Over $862 Million in Bank of America Stock

In a recent sequence of transactions, Berkshire Hathaway Inc., the conglomerate led by renowned investor Warren E. Buffett, has significantly reduced its stake in Bank of America Corp. over the course of three days, resulting in the sale of approximately $862,670,637 worth of shares in the major banking institution.

The selling activity commenced on September 20, 2024, with Berkshire Hathaway divesting 10,247,961 shares at an average price of $40.3633 per share. This was followed by the disposal of 4,941,403 shares on September 23 at an average price of $39.9444, and a final transaction on September 24 involving the sale of 6,371,845 shares at an average price of $39.4937. The share prices across these transactions ranged from $39.4937 to $40.3633.

Post-sale, Berkshire Hathaway retains a stake of 814,347,226 shares in Bank of America. It’s noteworthy that the sold shares were held by various subsidiaries of Berkshire Hathaway, as detailed in the SEC filing. These subsidiaries encompass a diverse range of insurance and financial services entities, including Government Employees Insurance Company (GEICO) and National Indemnity Company. Warren E. Buffett, as the controlling shareholder, is considered to beneficially own these shares.

According to the SEC filing, the reporting parties have committed to providing detailed information concerning the number of shares sold at each price within the specified ranges upon request by Bank of America, any of its security holders, or the Securities and Exchange Commission staff.

Warren E. Buffett authorized the reported transactions, representing both his personal holdings and those of other entities under Berkshire Hathaway Inc.

In related news, Bank of America has appointed David Dowd as the new president of its Asheville market, indicating the bank’s emphasis on leadership that can enhance local economic conditions. Dowd’s responsibilities will include increasing the bank’s market presence and bolstering client relationships in the area. Additionally, the banking sector, including Bank of America, has welcomed a recent Federal Reserve decision to cut interest rates, as this is expected to alleviate financial burdens on borrowers and reduce deposit costs for banks.

Despite the substantial reduction in its stake, Berkshire Hathaway remains Bank of America’s largest shareholder, having generated around $7 billion from share sales since mid-July. Analysts from Piper Sandler have kept a neutral rating on the bank’s shares, while Deutsche Bank has upgraded the stock from Hold to Buy, citing opportunities for revenue growth.

These developments highlight ongoing shifts in Bank of America’s leadership, shareholder dynamics, and the broader financial landscape.

Bank of America continues to maneuver through the financial sector with a balance of stability and strategic initiatives. It has raised its dividend consecutively for ten years, underscoring a dedication to shareholder value. Notably, the bank has maintained its dividend payments for over fifty years, showcasing its financial durability and sound management.

The company currently has a market capitalization of $306.58 billion, with a Price/Earnings (P/E) ratio of 13.76. An adjusted P/E ratio of 11.79 for the last twelve months as of Q2 2024 suggests potential undervaluation in relation to earnings. Additionally, the Price to Book (P/B) ratio is recorded at 1.15, indicating that the stock may be trading near its net asset value.

While Bank of America experienced a slight revenue decline of 1.75% over the past twelve months as of Q2 2024, analysts predict continued profitability for the company this year, having remained profitable throughout the last twelve months. This is significant for investors looking for stability and growth within the banking sector, where Bank of America holds a prominent position.

This article was generated with the support of AI and reviewed by an editor.