The billionaire investor has made Bank of America one of Berkshire Hathaway's top holdings.
Berkshire Hathaway (BRK.A 0.58%) (BRK.B 0.38%) is known for its massive $350 billion stock portfolio, as many of its positions were hand-selected by legendary investor CEO Warren Buffett himself.
Bank of America (BAC 1.35%) is Berkshire's second-largest stock investment. As of the latest information, Berkshire owns 1.032 billion shares of Bank of America, representing a 13.1% stake in the mega-bank. Based on the stock's price as of this writing, Berkshire's investment is worth $38.2 billion. Berkshire is Bank of America's largest shareholder.
One of Buffett's best investments
Not only is Bank of America a large investment for Berkshire, but it is one of the most successful in its portfolio.
Buffett first invested in Bank of America in the wake of the financial crisis -- in an unusual way. In August 2011, Buffett invested $5 billion of Berkshire's capital in Bank of America preferred stock that paid a 6% dividend yield, generating $300 million in annual income.
However, the preferred stock also came with warrants to buy 700 million shares of Bank of America common stock for $7.14 each. (This allowed Buffett to exchange his preferred stock for 700 million shares.)
Once Bank of America's common stock dividend increased to the point where Berkshire's dividend income would exceed the $300 million it was receiving from the preferred stock, Buffett exercised the warrants. So, Buffett paid $7.14 per share for most of Berkshire's stake -- less than one-fifth of its current stock price. Since the initial investment, Buffett has added more than 300 million shares.
Why Buffett likes Bank of America so much
In 2023, Buffett and his team unloaded stakes in several different bank stocks as several high-profile bank failures caused fear in the sector. But he never sold any of its Bank of America shares.
At Berkshire's 2023 shareholder meeting, Buffett reiterated how much he liked the bank's management (he has previously praised CEO Brian Moynihan).
Moynihan successfully navigated the aftermath of the financial crisis and turned the bank from an extremely troubled institution into one of the highest-quality, most respected institutions in the sector.
Bank of America is an advertising partner of The Ascent, a Motley Fool company. Matt Frankel has positions in Bank of America and Berkshire Hathaway. The Motley Fool has positions in and recommends Bank of America and Berkshire Hathaway. The Motley Fool has a disclosure policy.
FAQs
Berkshire Hathaway owns more than 1 billion shares of Bank of America, as of the latest information. The bank is Berkshire's second-largest investment, with a stake of 13.1% worth about $38 billion. The Bank of America investment was also one of Berkshire's most profitable.
How much money does Warren Buffett have invested in Bank of America? ›
BofA makes up 9.03% of Berkshire Hathaway's portfolio, the firm's second largest investment, according to Benzinga.com. As of Q1 2023, Buffett's BofA holdings were worth $35.5 billion, StockCircle.com reported.
What is Warren Buffett most invested in? ›
Apple is Berkshire's largest public stock holding by far. Berkshire's $151 billion Apple stake is roughly four times larger than its second-largest holding. Buffett first bought Apple shares in the first quarter of 2016, and Apple's stock price is up more than 500% since the beginning of 2016.
Who owns most of Bank of America? ›
Bank of America is a publicly held company owned by shareholders. Institutional investors own about 59% of its shares. The largest shareholder is Warren Buffett's Berkshire Hathaway, which owns about 13% of the shares.
Where does Warren Buffett have most of his money? ›
His fortune is largely tied to his investment company.
The vast majority of Buffett's net worth is tied to Berkshire Hathaway, his publicly traded conglomerate that owns businesses like Geico and See's Candies and holds multibillion-dollar stakes in companies like Apple and Coca-Cola.
How much money does Warren Buffett have? ›
How many billions is Bank of America worth? ›
Market cap: $310.46 Billion
As of May 2024 Bank of America has a market cap of $310.46 Billion. This makes Bank of America the world's 30th most valuable company by market cap according to our data.
What was the most profitable stock of all time? ›
The Best Performing Stocks in History
- Coca-Cola. (NASDAQ: KO) ...
- Altria. (NASDAQ: MO) ...
- Amazon.com. (NASDAQ: AMZN) ...
- Celgene. (NASDAQ: CELG) ...
- Apple. (NASDAQ: AAPL) ...
- Alphabet. (NASDAQ:GOOG) ...
- Gilead Sciences. (NASDAQ: GILD) ...
- Microsoft. (NASDAQ: MSFT)
Bill Gates Portfolio: 7 Best Stocks to Buy Now
| STOCK | % OF PORTFOLIO | MARKET VALUE OF SHARES |
|---|
| Waste Management Inc. (WM) | 16.4% | $7.5 billion |
| Berkshire Hathaway Inc. (BRK.B) | 15.9% | $7.3 billion |
| Canadian National Railway Co. (CNI) | 15.8% | $7.2 billion |
| Caterpillar Inc. (CAT) | 5.9% | $2.7 billion |
3 more rowsMay 22, 2024
Warren Buffett's Berkshire Hathaway acquired Dairy Queen for nearly $600 million in 1998. Dairy Queen CEO Troy Bader told Insider that Berkshire's ownership lets him invest for the long run. Bader explained how Dairy Queen has dealt with the pandemic, inflation, and new customer demands.
Overall, Bank of America appears to be in a relatively healthy financial position and is not currently in imminent danger of collapse. However, as with any financial institution, there are always risks involved, and customers and investors should always monitor the bank's financial health and risk profile.
Who owned 80% of the Bank of the United States? ›
Hamilton's “Report on a National Bank” (1790) outlined the need for a national bank to stabilize the economy. After heated debate, Congress approved the “Bank of the United States” (BUS) in 1791, with a $10 million capitalization, 80% privately owned and 20% government-owned.
What of Bank of America is owned by China? ›
No, Bank of America isn't owned by China. BofA is an American multinational investment bank that has a partnership with China Construction Bank.
What kind of car does Warren Buffett drive? ›
Despite being the sixth-richest person globally, Warren Buffett continues to drive a 2014 Cadillac XTS he purchased with hail damage. Although he can afford any luxury vehicle, Buffett prefers the practicality of his 10-year-old car.
What happened to Warren Buffett's wife? ›
Susan died at the age of 72 after suffering a cerebral hemorrhage during the summer of 2004 in Cody, Wyoming. Bono performed "Forever Young" and "All I Want Is You" at her funeral. Warren was so grief-stricken that he did not attend.
At what age did Warren Buffett become rich? ›
His early life set the foundation for his future achievements. By age 21, Buffett's net worth was nearly $20,000, and by 26, it had grown to $140,000. By age 30, his net worth had grown to $1 million, a significant sum compared to the average family income in the U.S. at that time, which was around $5,600 per year.
Does China own Bank of America? ›
No, Bank of America isn't owned by China. BofA is an American multinational investment bank that has a partnership with China Construction Bank. In 2011 they decided to sell about half of their stake (about 13.1 billion) in the Chinese company.
Who owns Bank of America stock? ›
The ownership structure of Bank of America (BAC) stock is a mix of institutional, retail and individual investors. Approximately 60.44% of the company's stock is owned by Institutional Investors, 27.63% is owned by Insiders and 11.93% is owned by Public Companies and Individual Investors.
Why is Bank of America stock so low? ›
BofA sits on huge unrealized losses in its loan portfolio
Bank of America shareholders may also be concerned about the bank's rising unrealized losses. Since the Federal Reserve began hiking interest rates in the first quarter of 2022, the bank's unrealized losses have ballooned from $13.7 billion to $112.8 billion.
Who owns the most Berkshire Hathaway stock? ›
Warren Buffett is the largest holder of Berkshire Hathaway (NYSE: BRK. A)(NYSE: BRK.B) stock. He owns around 227,416 shares of Class A stock, and 276 shares of Class B stock. These stakes combine for a value of roughly $136 billion, representing a 31.6% voting interest in the company.
