Buffett continues to reduce his holdings in Bank of America.
The latest documents show that Berkshire Hathaway sold Bank of America continuously from September 17th to 19th, reclaiming $896 million in funds.
Berkshire Hathaway has submitted multiple documents to regulators for the sale of Bank of America stocks in the past two months.
Since July 17th, Berkshire Hathaway has sold a total of 1.97 billion shares of Bank of America, reducing its holdings by 19% and recovering a total of $8.09 billion in funds.
After the reduction, as of September 19th, Berkshire Hathaway's stake in Bank of America has been reduced to 836 million shares. Based on the latest closing price of $40.87 per share, Berkshire Hathaway holds Bank of America worth $34.167 billion. Berkshire Hathaway may still be the largest shareholder of Bank of America, holding 10.77% of the shares.
Prior to July 17th, Berkshire Hathaway held 1.033 billion shares of Bank of America, representing a staggering 13.08% stake in the company.
Buffett's holdings in Bank of America originated from his investment in 2011.
In 2011, when the stock price of Bank of America was low, Buffett's Berkshire Hathaway invested $5 billion in Bank of America and obtained preferred stock and warrants. A few years later, Bank of America increased its dividend payout ratio, and Buffett converted it into common stock. Data shows that since 2017, Bank of America's annual dividend payout ratio has remained stable at over 20%, with an average annual dividend yield of around 2%. After multiple adjustments, Berkshire Hathaway gradually became the largest shareholder of Bank of America. Between 2020 and July of this year, Berkshire Hathaway held 1.033 billion shares of Bank of America without reducing any of its holdings.
Since 2011, the stock price of Bank of America has risen eight times cumulatively. Roughly calculated, the $8.09 billion in funds recovered by Berkshire Hathaway, along with annual dividends, has recovered its investment cost in Bank of America.
What does Buffett like now?
In recent months, Buffett has significantly reduced his holdings of various stocks. According to the report, Berkshire Hathaway reduced its holdings of Apple by over 389 million shares in the second quarter, with a market value of approximately $82 billion. Its holdings decreased by 49.3% compared to the first quarter, and its proportion in the investment portfolio decreased by more than 10 percentage points compared to the previous quarter.
Berkshire also liquidated 6.12 million shares ($840 million) of cloud computing star Snowflake; Reduced 4.37 million shares ($680 million) of Chevron; Reduced holdings of 2.65 million shares ($367 million) in COF, a financial holding company
Now, Buffett doesn't even want his own stocks, what does he like?
Berkshire said that if the repurchase would reduce the company's cash and treasury bond holdings to less than $30 billion, the company would not repurchase, but this is almost impossible. As of the end of June, Berkshire Hathaway's cash reserves were close to $277 billion, mainly from the sale of a large number of stocks, especially Apple stock.
Aash Shah, investment director and senior portfolio manager of Summit Global Investments, said: "In a word, Buffett seems to think that the best investments at present are cash and treasury bond bonds."
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