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Warren Buffett Invests Almost $400 Million More in Bank of America

By Bram Berkowitz – Jul 28, 2020 at 1:11PM

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Word of the large stock purchase came less than a week after Berkshire Hathaway revealed it had recently bought more than $800 million worth of the bank's shares.

The Oracle of Omaha is bullish on Bank of America (BAC -2.37%). That much is clear.

Days after revealing that he had invested another $813 million in one of the country's largest banks, Warren Buffett's Berkshire Hathaway (BRK.A -0.22%) wheeled around and invested almost $400 million more in it.

Buffett bought that earlier Bank of America stake between July 20 and July 22 at share prices ranging from $23.50 to $24.20. He added the next batch between July 23 and July 27 at share prices ranging from roughly $24.10 to roughly $24.30.

Warren Buffett

Image Source: Getty

Those recent buys bring Berkshire Hathaway's total ownership stake in Bank of America to about $24.2 billion and more than 998 million shares -- roughly 11.4% of its shares outstanding.

Many market observers have wondered if Buffett was being too conservative in the wake of the sharp decrease in equities that occurred this spring as a result of the coronavirus pandemic -- especially given that Berkshire Hathaway had in prior years built up a cash hoard of $128 billion.

Berkshire began to deploy some of that capital earlier this month when it purchased the natural gas assets of Dominion Energy (D -0.88%) for $9.7 billion. 

Bank of America delivered its second-quarter earnings results on July 16, reporting a profit of roughly $3.5 billion. That was down from $4 billion in the first quarter of the year, and well off the $7.3 billion it earned in Q2 2019, declines largely driven by its moves to bolster its loan-loss provisioning in light of the U.S. recession.

Buffett and Berkshire have taken a somewhat mixed approach to bank stocks this year. The conglomerate decreased its position in Wells Fargo (WFC -2.67%), and dumped most of its stake in Goldman Sachs (GS -3.50%), but increased its stake in PNC Financial Services Group (PNC -1.78%) and now Bank of America.

Bram Berkowitz has no position in any of the stocks mentioned. The Motley Fool recommends Dominion Energy, Inc. The Motley Fool has a disclosure policy.

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Stocks Mentioned

Bank of America Corporation Stock Quote
Bank of America Corporation
$31.73 (-2.37%) $0.77
The Goldman Sachs Group, Inc. Stock Quote
The Goldman Sachs Group, Inc.
$301.97 (-3.50%) $-10.95
Wells Fargo & Company Stock Quote
Wells Fargo & Company
$40.41 (-2.67%) $-1.11
Berkshire Hathaway Inc. Stock Quote
Berkshire Hathaway Inc.
$404,485.25 (-0.22%) $-889.76
The PNC Financial Services Group, Inc. Stock Quote
The PNC Financial Services Group, Inc.
$151.92 (-1.78%) $-2.75
Dominion Resources, Inc. Stock Quote
Dominion Resources, Inc.
$77.75 (-0.88%) $0.69

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

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