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Bank of America Corp (NYSE:BAC) shares are trading slightly lower at $38.65 this week, through Wednesday morning, after Berkshire Hathaway recently sold off over $550 million worth of Bank of America shares, averaging $39.50 per share.
What Else: This sale reduces Berkshire’s holding to about 928 million shares, worth around $37 billion, or roughly 12% of the company’s total shares. Additionally, if Berkshire's stake falls below 10%, it would no longer be required to disclose share sales within two days.
This divestment is part of a broader trend where Berkshire has reduced its investments in banks, such as Wells Fargo and Bank of New York Mellon, and it now only holds a small stake in Citigroup.
Berkshire Hathaway’s large-scale sale might signal to the market that a major investor lacks confidence in Bank of America’s future performance, potentially leading other investors to sell their shares as well.
Although exact reasons remain unclear, the sale could also suggest that Berkshire believes the stock is overvalued or that there are potential issues with Bank of America's financial health or prospects, prompting concerns among investors.
Berkshire Hathaway last week also disclosed significant stock sales in the second quarter, including selling over 389 million Apple shares. Despite this large sale, Berkshire Hathaway still holds 400 million Apple shares.
When deciding whether to buy a stock, there are some key fundamentals investors may want to consider. One of these factors is revenue growth. Buying a stock is essentially a bet that the business will continue to grow and generate profits in the future.
It's also important to pay attention to valuation when deciding whether to buy a stock. Bank of America has a forward P/E ratio of 11.72. This means investors are paying $11.72 for each dollar of expected earnings in the future. The average forward P/E ratio of Bank of America's peers is 11.38.
Other important metrics to look at include a company's profitability, balance sheet, performance relative to a benchmark index and valuation compared to peers. For in-depth analysis tools and important financial data, check out Benzinga PRO.
According to data from Benzinga Pro, BAC has a 52-week high of $44.44 and a 52-week low of $24.96.
Posted In: BAC
