2. Bank of America Corporation (NYSE:BAC)
Warren Buffett’s First Major Purchase: 2017
Berkshire Hathaway’s Latest Investment Stake: $41.08 Billion
Number of Hedge Funds Holding Stakes as of Q2: 92
Bank of America Corporation (NYSE:BAC) is one of Warren Buffet’s longest holdings in the financial services sector. The company offers banking and financial products to individuals, businesses, institutional investors, and large corporations through its subsidiaries.
Bank of America Corporation (NYSE:BAC) is one of the oldest banks in the US, with a history dating back to 1904. Its track record in standing the test of time has always made it a firm favorite for the billionaire investor. Additionally, it is a leader in the US retail deposits, a clear indication of trust among consumers in the US and 35 countries.
Additionally, the financial conglomerate has consistently generated profits. Over the last ten years, its net profit margin has typically been around 25%. This financial success enables the company to keep distributing dividends. For investors who prefer stocks that offer a steady passive income, Bank of America Corporation (NYSE:BAC) could be attractive due to its 2.46% dividend yield, which affirms why it is one of the best long-term stocks to buy, according to Warren Buffett.
It boasts a total asset value exceeding $3.3 trillion, establishing itself as a significant player in the financial sector and underscoring its solid foundation. Additionally, it holds a substantial deposit portfolio valued at nearly $2 trillion. Although it is gradually growing, these expansions are not significant enough to alter its position. Over the decade from 2013 to 2023, Bank of America Corporation (NYSE:BAC) experienced a modest increase in revenue of 11%.
Buffett’s investment firm Berkshire has sold about 5.8 million shares of the financial services company for about $228.7 million. The transaction is believed to have occurred between September 6 and September 10 2024. Buffett still remains the biggest shareholder in the bank.
The stock trades at a price-to-earnings (P/E) ratio of 13.6. While nearly double what it sold for late last year, it is expected of a financial institution that has benefited from higher interest rates.
During June 2024, 92 out of the 912 hedge funds part of Insider Monkey’s research were the firm’s investors. Bank of America Corporation (NYSE:BAC)’s largest shareholder is Warren Buffett’s firm, courtesy of its $41.08 billion investment.
Here is what ClearBridge Value Equity Strategy said about Bank of America Corporation (NYSE:BAC) in its first quarter 2024 investor letter:
“We added several new positions during the quarter. Our largest new addition was Bank of America Corporation (NYSE:BAC), one of the world’s leading financial institutions, serving some 66 million consumer and small business clients across the U.S. as well as large corporations, financial institutions and governments globally. We believe that the interest rate pressure that Bank of America faced in early 2023 has subsided, and risks surrounding deposit outflows have abated, which should allow the company to improve its book value and capital growth as well as benefit from a rebound of capital markets activity.”
