Warren Buffett is still on a selling spree. Berkshire Hathaway continues to trim its position of Bank of America, unloading an additional 21 million shares since Sept. 20, according to the conglomerate’s latest filing on Tuesday. Berkshire, which remains the bank’s largest shareholder, has sold about $9 billion worth of the stock since July.
The most recent sales account for roughly $863 million in proceeds and came after the company made disposals of 45.6 million shares earlier last week. Berkshire still owns a 10.5% stake in the bank worth about $33 billion, making it the conglomerate’s third-largest public holding.
The bank’s shares dropped just under 1% Monday morning, with Berkshire Class B shares also down slightly. Bank of America’s stock remains up 15% for the year, slightly trailing the S&P 500’s 21% gain. Berkshire, currently America’s seventh-largest public company as its market cap sits just below $1 trillion, is up over 24% in that span.
Many suspect Buffett wants to trim Berkshire’s stake below the 10% reporting threshold for beneficial ownership. It also appears to be profit taking.
Buffett first invested in America’s second-largest bank when Berkshire bought $5 billion worth of preferred stock in 2011, a vote of confidence in CEO Brian Moynihan's ability to lead the lender’s recovery following the 2008 financial crisis. As of last Thursday, the total proceeds that Berkshire has reaped from BoA stock sales and dividends since 2011 has surpassed the $14.6 billion it spent to build its stake, Bloomberg reported. In other words, Berkshire's remaining stake represents pure profit.
Buffett, whose evaluations of management are critical to his investing strategy, told CNBC last year that he liked Moynihan “enormously.”
Earlier this month, the bank’s chief executive returned the praise at the Barclays Global Financial Services Conference.
“He has been a great investor for our company, stabilized our company,” Moynihan said. "I don't know what exactly he is doing because frankly we can't ask.”
Buffett has also trimmed portfolio with massive Apple sell-off
Buffett has also made plenty of headlines in recent months for nearly halving Berkshire’s stake in Apple. Berkshire sold $75.5 billion worth of the stock during the second quarter of this year, taking the conglomerate’s cash pile to a record $276.9 billion, in a move that Fortune’s Shawn Tully said, “will go down as one of the best bets of his career.”
In 2016, Tully wrote, Buffet built his massive position with shares trading at a price-to-earnings ratio of 16. Berkshire began taking profits, he noted, after the P/E ratio had doubled.
The iPhone maker remains Berkshire’s largest holding, with the conglomerate holding exactly 400,000,000 shares—the same number as his Coca-Cola holding—with a market value of over $90 billion.
