Warren Buffett surprised many investors by downsizing one of his longest held and largest positions — Bank of America . Here's what could have driven the sale by the Oracle of Omaha. Berkshire Hathaway recently unloaded 52.
8 million Bank of America shares worth $2.3 billion during a six-day selling spree, the first time since late 2019 that the Omaha-based conglomerate reduced its holding. Berkshire still owns 980.
1 million BofA shares with a market value of $41.3 billion , a distant second to its $172.5 billion holding in Apple .
Buffett famously bought $5 billion worth of BofA's preferred stock and warrants in 2011 in the aftermath of the financial crisis, shoring up confidence in the embattled lender struggling with losses tied to subprime mortgages. He converted those warrants in 2017, making Berkshire the largest shareholder in BofA, vowing that it would be a "long, long time" before he would sell. The legendary investor said then that he liked the business, valuation and management of the Charlotte-based bank "very much.
" BofA, under the leadership of Brian Moynihan since 2010, just reported blowout results that showed rising investment banking and asset management fees as well as a positive outlook on net interest income. One red flag that's recently stuck out is valuation. BofA is currently trading for about 12 times forward earnings, compared to an average multiple of 10 times over the past two years, according to FactSet.
The bank stock has rallied 24% this year, .
