Please ensure Javascript is enabled for purposes of website accessibility

Buffett's Berkshire Hathaway Now Holds Almost 12% of Bank of America

By Eric Volkman – Aug 5, 2020 at 5:44PM

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

The star investor has added to Berkshire's stake several times over the past few weeks.

Buying shares of Bank of America (BAC -2.23%) is a habit Warren Buffett just can't seem to shake.

According to a regulatory filing submitted late Tuesday, the renowned investor's Berkshire Hathaway (BRK.A -1.25%) (BRK.B -1.31%) has spent $2.07 billion since the middle of last month on Bank of America common stock in a series of purchases.

This gives Berkshire a stake of 11.9% in the big lender, making it the largest publicly traded company in its portfolio in terms of total number of shares. Bank of America is Berkshire's No. 2 holding in terms of total market value (No. 1 is Apple).

Warren Buffett.

Warren Buffett. Image source: The Motley Fool.

Berkshire typically offers little commentary, if any, on its stock buys, so it is unclear why Buffett and his colleagues are so bullish on Bank of America. Relative to many rival lenders, it has a strong balance sheet. And its dividend is considered to be more secure than those of its peers (such as Wells Fargo, another large Berkshire investment, which cut its dividend by 80% last month).

Buffett is a long-term fan of companies in the finance sector. He has routinely bought shares of banks and other financial services companies in their times of struggle and distress. Outside of Bank of America, much of Berkshire's equity portfolio is made up of stocks in the sector.

Frequently, Buffett/Berkshire purchases engender the "Buffett effect," in which the new investments rise in price simply because the famed investor bought them. That might have been the case today with Bank of America: The company's shares closed 1.5% higher, easily eclipsing the gains of the top equity indexes on the day.

Eric Volkman has no position in any of the stocks mentioned. The Motley Fool owns shares of and recommends Apple and Berkshire Hathaway (B shares) and recommends the following options: short September 2020 $200 calls on Berkshire Hathaway (B shares), long January 2021 $200 calls on Berkshire Hathaway (B shares), and short January 2021 $200 puts on Berkshire Hathaway (B shares). 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 Stock Quote
Bank of America
$36.86 (-2.23%) $0.84
Berkshire Hathaway (A shares) Stock Quote
Berkshire Hathaway (A shares)
$472,712.01 (-1.25%) $-5,963.54
Berkshire Hathaway (B shares) Stock Quote
Berkshire Hathaway (B shares)
$313.27 (-1.31%) $-4.16
Apple Stock Quote
$144.22 (-2.63%) $-3.89
Wells Fargo Stock Quote
Wells Fargo
$46.98 (-0.97%) $0.46

*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
S&P 500 Returns

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 11/28/2022.

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.