1. Bank of America Corporation (NYSE:BAC)
Number of Hedge Fund Holders: 99
Share Price (as of June 9): $34.51
Bank of America Corporation (NYSE:BAC) is the second largest banking company in the United States, and part of the Big Four banking institutions alongside Citigroup, JPMorgan Chase, and Wells Fargo. Shares of the company are priced at around $34.5, making it one of the most affordable high-quality names to buy. BAC pays a 2.67% dividend as of June 14, and has increased its payouts for 8 years in a row.
In early May, Oppenheimer analyst Chris Kotowski urged investors to take advantage of Bank of America Corporation’s (NYSE:BAC) recent share price weakness and buy the stock. He noted that banks tend to do well when interest rates rise, and that they should remain “solidly profitable with their dividends intact” in the current macro environment. The analyst gave the stock an unchanged ‘Outperform’ rating and a $50 price target, down from $52.
For the first quarter of 2022, Bank of America Corporation (NYSE:BAC) posted revenue of $23.23 billion, which exceeded analysts’ forecasts by $135.8 million. EPS stood at $0.80, above market forecasts by $0.06.
At the end of the first quarter, 99 out of the 912 hedge funds tracked by Insider Monkey owned positions in Bank of America Corporation (NYSE:BAC), with a collective price tag of $45.43 billion. This shows an improving trend over the previous quarter where 84 hedge funds were long on the company shares. With a massive $41.6 billion position, Warren Buffett’s Berkshire Hathaway was the most prominent shareholder of Bank of America Corporation (NYSE:BAC) in the first quarter.
Investment firm Miller Value Partners talked about Bank of America Corporation (NYSE:BAC) in its Q1 2022 investor letter. Here’s what the fund said:
“There are many times when volatility and beta give false signals. Banks outperformed in the post-tech bubble bear market of the early 2000s. At the market peak prior to the financial crisis (when risk was the highest in those names!), Bank of America (NYSE:BAC) had a 0.9x beta (based on the trailing 5 years) suggesting its “risk” was below the market’s. Wrong! It massively underperformed in the financial crisis. Realized beta over the 5 years from the pre-crisis’ 2006 peak measured 2.3x.
A much better indicator of actual risk, both before and after the financial crisis, was the quality of the balance sheet and risk-taking appetite. Beta is backwards looking and non-stationary. Relying on it underestimated risk going into the financial crisis and overestimated coming out of it (its beta has continued to fall over the past decade).
We care greatly about risk. We spend a significant amount of time thinking about the risks to our investments. We measure risk as permanent impairment of capital, which means the prices and values don’t bounce back. Business fundamentals determine risk.”
You can also take a look at Top 10 Energy Dividend Stocks To Invest In and 10 Best Stock Picks and Investments Of Billionaire Chamath Palihapitiya.
