2. Bank of America Corporation (NYSE:BAC)
Number of Hedge Fund Holders: 72
Bank of America Corporation (NYSE:BAC) is based in North Carolina, and it is a financial services company and investment bank that delivers services including asset management, commodities, credit cards, equities trading, insurance, investment management, mutual funds, private equity, and risk management.
On October 20, Bank of America Corporation (NYSE:BAC) declared a $0.21 per share quarterly dividend, in line with previous, which was paid on December 31.
In April, Bank of America Corporation (NYSE:BAC) announced plans to repurchase up to $25 billion in common stock over time. Through the end of the third quarter of 2021, approximately $14 billion in stock had been repurchased under that program.
Bank of America Corporation (NYSE:BAC) published its Q4 results on January 19, posting earnings per share of $0.82, exceeding estimates by $0.06. Revenue for the period jumped 9.14% year-over-year to $22.06 billion, but missed estimates by $131.21 million.
Argus analyst Stephen Biggar raised the price target on Bank of America Corporation (NYSE:BAC) on January 20 to $55 from $50 and kept a Buy rating on the shares after its Q4 earnings beat. Bank of America Corporation (NYSE:BAC)’s net interest margins should begin to improve in 2022 as interest rates start to rise, the analyst tells investors in a research note. He believes that at 14.5-times his expected 2022 EPS, the stock is “attractively valued”.
In Q3 2021, 72 hedge funds were bullish on Bank of America Corporation (NYSE:BAC), with stakes totaling $46.4 billion. Warren Buffett’s Berkshire Hathaway is the biggest Bank of America Corporation (NYSE:BAC) stakeholder as of the third quarter of 2021, holding more than 1 billion shares worth $42.8 billion.
Here is what Oakmark Funds has to say about Bank of America Corporation (NYSE:BAC) in its Q3 2021 investor letter:
“Earlier this year, one of our holdings, Bank of America, announced that it was raising its minimum hourly wage from $15 to $20 and would increase it to $25 by 2025. The company received great press for placing the well-being of its employees above profits. But was it really either/or? Bank of America’s chief human resources officer spoke to the bigger picture: “A core tenet of responsible growth is our commitment to being a great place to work…that includes providing strong pay and competitive benefits to help them and their families, so that we continue to attract and retain the best talent.” Bank of America understood that engaged, high-caliber employees are more productive, less prone to turnover and, therefore, less expensive in the long run. Increasing the pay for employees wasn’t elevating employees above shareholders; it was the right thing to do for employees and for shareholders.
If an increase to $20 was good, why stop there? Why not $50 per hour? Because the benefits the business receives at $50 don’t justify the expense. The bank would no longer be able to price its products competitively and would lose business. The employees would “win” in the short term, but eventually the lost business would lead to job cuts, meaning both employees and shareholders would lose. The negative effects of stakeholder overreach are no different than when CEOs overreach to inflate short-term profits. Both hurt shareholders and stakeholders.”
