Warren Buffett Disciple Guy Spier’s 10 High Conviction Stock Picks

3. Bank of America Corporation (NYSE:BAC)

Value of Aquamarine Capital Management’s 13F Position (6/30/2024): $30.5 million

Number of Hedge Fund Shareholders (3/31/2024): 85

Warren Buffett’s second-favorite stock, Bank of America Corporation (NYSE:BAC), ranks as Guy Spier’s third-highest conviction equity. Mr. Spier’s firm has owned 767,845 BAC shares since the first quarter of2019, while Buffett’s holding company Berkshire Hathaway owned a staggering 1.03 billion shares as of March 31, but has been selling off BAC shares for several quarters. Other money managers aren’t nearly as bullish on the investment bank right now; their ownership of the company fell by 16% during Q1 to the second-lowest mark in the last decade.

Bank of America Corporation (NYSE:BAC) suffered an expected decline in net interest income during Q2, to $6.9 billion, but that was overcome by an increase in non-interest income. The company’s earnings were evenly split between its consumer and business divisions, which included strong growth in both its consumer banking division (net new checking accounts topped half a million for the first six months of 2024) and commercial segment (adding thousands of small businesses). Zelle adoption has been a major driver of growth for both segments, with Bank of America’s banking app now boasting more than 47 million active users.

ClearBridge Value Equity Strategy discussed why less interest rate pressure should improve Bank of America Corporation (NYSE:BAC)’s prospects going forward in the fund’s Q1 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.”