Please ensure Javascript is enabled for purposes of website accessibility

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

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

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

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.

Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Stocks Mentioned

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

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

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning analyst team.

Stock Advisor Returns
329%
 
S&P 500 Returns
106%

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 09/24/2022.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.