Warren Buffett’s 2023 Portfolio: Top 5 Stock Picks

2. Bank of America Corporation (NYSE:BAC)

Number of Hedge Fund Holders: 100

Warren Buffett’s Berkshire Hathaway’s Holdings: $29,539,567,372        

Percentage of Warren Buffett’s Berkshire Hathaway’s Portfolio: 9.08%

On May 12, Glenn Schorr at Evercore ISI assigned Bank of America Corporation (NYSE:BAC) stock a target price of $35, along with an Outperform rating. The rating came after the state-operated Federal Deposit Insurance Corporation (FDIC) shared the details of replenishing deposit insurance funds following the recent failures of US banks. Warren Buffett built his stake in the company by exercising $5 billion worth of warrants with an exercise price of $7.14. The warrants were exercised against a 6% preferred share held by Berkshire Hathaway back in June 2017.

Here’s what Oakmark Funds said about Bank of America Corporation (NYSE:BAC) in its Q1 2023 investor letter:

“The Oakmark Equity and Income Fund has 29% of its equity portfolio in financials. This made the March sell-off painful, but we do not believe that this has meaningfully changed the value of most of our financial equity holdings. In fact, we were adding to financial positions throughout March. We believe that one way to analyze our financial holdings is to look at them in different buckets given their various business models and risk profiles. Almost 30% of our financial exposure is in insurance companies and insurance brokers. Insurance companies have very stable liability profiles, so the main risk is a change in asset values. We are comfortable with their investment portfolios and think these stocks are quite attractive. Around 5% of our financials are asset managers. This leaves a little over 40% of the financials exposure in a varied group of banks and lenders. About 5% of that portfolio is in Bank of America Corporation (NYSE:BAC) and State Street. These two banks are designated as Systematically Important Financial Institutions and are held to higher regulatory standards. Our largest single financials holding is Bank of America, which has grown deposits during March, and we believe it is one of the best managed companies in the sector.”