1. Bank of America Corporation (NYSE:BAC)
Daily Journal’s Stake Value: $102,327,000
Percentage of Daily Journal’s 13F Portfolio: 39.56%
Number of Hedge Fund Holders: 72
Bank of America Corporation (NYSE:BAC), a multinational investment bank and financial services company, is the largest holding in Charlie Munger’s Q4 portfolio, with the billionaire holding 2.30 million shares of the company, worth $102.3 million, representing 39.56% of his total investments for the period. When Munger first invested in Bank of America Corporation (NYSE:BAC), he stated that he does not buy stocks based on a company’s ratios, rather his investment decisions are based on how the firm actually functions. He invested in Bank of America Corporation (NYSE:BAC) during the peak financial crisis of 2009, and acquired the shares at a heavy discount.
On October 20, Bank of America Corporation (NYSE:BAC) announced a quarterly per share dividend of $0.21, in line with previous. The dividend was paid on December 31 to shareholders of record on December 3. Bank of America Corporation (NYSE:BAC) announced in April 2021 its plans to repurchase $25 billion in common stock over time. By the end of Q3, the company had repurchased stock worth $14 billion under this program.
Piper Sandler analyst Jeffery Harte raised the price target on Bank of America Corporation (NYSE:BAC) to $57 from $54 and kept an Overweight rating on the shares on January 11. The analyst continues to believe that Bank of America Corporation (NYSE:BAC) is the large cap bank stock to own for 2022.
Bank of America Corporation (NYSE:BAC) disclosed on January 6 that it will redeem all $500 million of its 3.335% fixed/floating rate senior bank notes, which were originally due January 2023, on January 25, 2022.
Among the hedge funds tracked by Insider Monkey in Q3 2021, Harris Associates is one of the leading Bank of America Corporation (NYSE:BAC) stakeholders, with 59.4 million shares worth $2.5 billion. Overall, 72 funds were bullish on the stock in the third quarter.
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.”
You can also take a look at 10 Biotech Stocks To Buy According To Chinese Billionaire Lei Zhang and Top 10 Stock Picks of Apocalyptic Investor Crispin Odey.
