Warren Buffett’s Berkshire Hathaway (BRK.A) (BRK.B) has sold about 33.9 million shares of Bank of America (BAC) for $1.48 billion, according to a recent SEC filing. Following the release of the news, BAC stock fell about 1.5% in pre-market trading today.
It should be noted that Berkshire’s decision to divest its stake in BAC came just a few days after the release of the bank’s Q2 results. Though BAC exceeded both earnings and revenue estimates, profits dropped 5.7% from the year-ago quarter due to a fall in net interest income.
Details about Berkshire’s Recent Stake Sale
The divestment reduced Berkshire’s ownership to approximately 999 million Bank of America shares, valued at over $42 billion. The transactions occurred between July 17 and 19, with prices ranging from $43.13 to $44.07. Despite this sale, Buffett continues to be one of BAC’s largest shareholders.
Interestingly, Berkshire began investing in BAC stock back in 2011, during a period when many investors questioned the bank’s capital health.
Berkshire’s decision to unload BAC stock could be interpreted as a bearish signal. Nonetheless, retail investors should analyze stocks on multiple parameters. Savvy investors can leverage TipRanks’ Experts Center tools to enhance their decision-making process and make well-informed investment choices.
Is BAC a Good Buy Right Now?
BAC stock has received 10 Buy, five Hold, and one Sell recommendations for a Moderate Buy consensus rating. While analysts are cautiously optimistic, the stock sports a “Perfect 10” Smart Score on TipRanks. It’s worth noting that the shares carrying a “Perfect 10” Smart Score have easily outperformed the S&P 500 Index (SPX) by a significant margin over the past several years.
Further, the analysts’ average price target on BAC stock of $45.16 implies 5.3% upside potential from current levels.
