Warren Buffett sells Bank of America shares, what other financial stocks does he still own?
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Whenever Warren Buffett’s Berkshire Hathaway (NYSE:BRK) (NYSE:BRK) makes a deal, the financial world takes notice. Last week, an SEC filing revealed that Berkshire Hathaway reduced its holding in Bank of America (NYSE:BAC), selling 33.9 million shares worth $1.48 billion. The company still holds 999 million shares of Bank of America stock, valued at about $29.94 billion. Because of Berkshire Hathaway’s large holding in Bank of America, it was required to file a special notice with the Securities and Exchange Commission, separate from its regular 13F filings.
Should investors take any signal from this? What other financial companies does Berkshire Hathaway still have large investments in? Berkshire Hathaway sold Bank of America when it was nearing its 52-week high, which could simply have been profit-taking. But it could also be a sign of concern about Bank of America and financial companies in general.
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Berkshire Hathaway still invests in financial companies
Berkshire Hathaway’s investments are notoriously concentrated. The majority of the company’s outside investments are spread across five companies. Last quarter, it reported that 75% of the company’s equity investments are spread across just five companies.
American Express (NYSE:AXP) $34.5 billion
Apple (NASDAQ:AAPL) $135.4 billion
Bank of America (NYSE:BAC) $39.2 billion
Coca-Cola (NYSE:KO) $24.5 billion
Chevron (NYSE:CVX) $19.4 billion
American Express is best known for its credit cards, charge cards, and travel services, but it also operates as a financial services company and bank. This includes offering personal savings accounts, certificates of deposits (CDs), and other financial products through its online banking platform. In addition, the company also offers business lending, payment solutions, and expense management services. As a bank holding company, it is subject to regulations governing banking institutions. Total loans increased 15% in the second quarter of 2024.
Much of American Express’s recent growth has come from its international business, which grew 13%. The company raised its full-year guidance range from $12.65 previously to $13.15 to $13.30-13.80, and is targeting full-year revenue growth in the range of 9% to 11%. On the company’s most recent earnings call, Steven Squeri said that while we may see some discretionary cuts, the U.S. consumer has been extremely stable and believes that trend will continue for the rest of the year.
The story continues
Berkshire Hathaway tends to change its financial holdings depending on market movements. In 2020, it sold shares of JPMorgan Chase (NYSE: JPM), PNC Financial Services (NYSE: PNC), and M&T Bank (NYSE: MTB). When the Silicon Valley Bank collapse roiled the market in 2023, Berkshire Hathaway reduced its stakes in U.S. Bancorp (NYSE: USB) and Bank of New York Mellon (NYSE: BK). At that point, it added shares of Bank of America and began investing in Capital One (NYSE: COF).
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Aside from the financial giants, Berkshire Hathaway also has stakes in other financial companies, the most interesting being Nu Holdings (NYSE:NU), a Latin American fintech company. Berkshire Hathaway’s stake in Nu Holdings represents just 0.26% of the company’s total portfolio, but it offers an interesting look into the future of the financial industry. Nu Holdings surpassed 100 million customers earlier this year and is now the fourth-largest financial institution in Latin America.
It’s impossible to know why Berkshire Hathaway decided to reduce its holdings in Bank of America. It could be exposure to a weakening consumer market or other opportunities in the broader market that the company wants to exploit. Despite the relatively large sale, this does not seem to signal a lack of confidence in the financial services industry. We’ll have to wait for Berkshire Hathaway’s next 13F filing to learn more about the company’s latest small-finance deal.
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The article “Warren Buffett Sells Bank of America Stakes, What Other Financial Stocks Does He Own?” originally appeared on Benzinga.com.