Will Bank of America become Buffett & Berkshire’s largest position ?!


Warren Buffett has struck on a larger scale in the past few days. In addition to share buy-backs, which have a certain regularity, and the acquisition of infrastructure assets, it was particularly that Bank of America (WKN: 858388) where the Omaha Oracle struck again.

So far, however, in a comparatively small style: the purchase price for the US money house was initially around $ 0.8 billion. It has also become known over the past few days that a further $ 0.4 billion has been invested in Bank of America shares, with the final total amounting to $ 1.2 billion.

This has the second largest participation of Berkshire Hathaway (WKN: A0YJQ2) slightly increased. Many an investor might ask: Will the money house possibly become the largest participation of the investment company? An exciting question that we want to get to the bottom of in the following.

A lot would be necessary for this!

As I said, Warren Buffett and Berkshire Hathaway had previously owned many Bank of America stocks. According to the current purchases, the Omaha Oracle holds 11.5% of all outstanding shares in the bank. Or, in absolute terms, a share package that corresponds to approximately 998 million shares. Numbers that we can now count on a little.

If we take 11.5% of the current market capitalization of $ 215.2 billion, the share equals around $ 24.75 billion. By contrast, the 998 million shares correspond to a stock market value of $ 24.89 billion at a share price of $ 24.84 (July 30, 2020). The truth is probably somewhere in between. After all, we don’t do exact rocket science.

Before Bank of America would become Berkshire Hathaway’s largest equity position, however, a lot still had to happen: currently ranked Apple (WKN: 865985) finally took first place, with the participation in the cult group from Cupertino now reaching a market value of $ 62.4 billion. Yes, definitely: there is a huge difference between them.

Will Bank of America stay in second place?

The first place is therefore not likely to be. That also seems to have a certain legality: Warren Buffett finally ennobled Apple to be another part of Berkshire Hathaway. In principle, this gives participation a lot of weight.

The exciting question is likely to be whether Bank of America will remain the second largest holding in the foreseeable future. With a cash mountain of over $ 100 billion, of course, you can never say that for sure. However: the third largest participation, Coca Cola (WKN: 850663), currently has a market value of approximately $ 17.7 billion. Here, too, there is always a larger distance.

That may continue to grow: Warren Buffett has finally invested around $ 1.2 billion in Bank of America and there may be further acquisitions. The stock of the money house is or was at least on the purchase list of the Oracle of Omaha. This is perhaps the most important interim conclusion that we can now draw about the portfolio structure.

Apple remains the biggest stake!

That Apple will remain Berkshire Hathaway’s largest stock package seems to be set in stone quite clearly. However, Bank of America has a good chance of remaining in a strong second place. The huge cash mountain could of course cause a shift.

The post Will Bank of America become Buffett & Berkshire’s largest position ?! appeared first on The Motley Fool Germany.

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Vincent owns Berkshire Hathaway shares. The Motley Fool owns and recommends Apple and Berkshire Hathaway (B shares) and recommends the following options: Short September 2020 $ 200 call on Berkshire Hathaway (B-Aktien), Short January 2021 $ 200 put on Berkshire Hathaway (B shares) and Long January 2021 call $ 200 Berkshire Hathaway (B-Aktien).

Motley Fool Deutschland 2020


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