Warren Buffett Sells Bank Of America Shares, What Other Financials Does He Still Hold?

Whenever Warren Buffett's Berkshire Hathaway BRK BRK makes a trade, the financial world pays close attention. Last week, SEC filings revealed that Berkshire Hathaway trimmed its position in Bank of America BAC, selling 33.9 million shares with a value of $1.48 billion. It still owns 999 million shares of Bank of America with a value of approximately $29.94 billion and remains one of its biggest shareholders. Because of Berkshire Hathaway's significant stake in Bank of America, it had to file a special notice with the Securities and Exchange Commission outside of its normal 13F filings.

Should investors take any signals from this? What other financial companies is Berkshire Hathaway still heavily invested in? Berkshire Hathaway sold Bank of America when it was close to its 52-week high, and the sale could just be profit-taking. However, it could also signal some concerns with either Bank of America or financial companies in general. 

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Berkshire Hathaway Is Still Invested In Financial Companies

Berkshire Hathaway’s investments are famously concentrated. The bulk of its external investments are spread across five companies. As of last quarter’s report, 75% of its investment in equities was spread across just five companies:

1. American Express AXP $34.5 billion
2. Apple AAPL $135.4 billion
3. Bank of America BAC $39.2 billion
4. The Coca-Cola Company KO $24.5 billion
5. Chevron CVX $19.4 billion

While it is best known for its credit card, charge card, and travel services, American Express operates as a financial services corporation and a bank. This includes offering personal savings accounts, certificates of deposit (CDs), and other financial products through its online banking platform. In addition, the company offers business financing, payment solutions, and expense management services. As a bank holding company, it is subject to regulations that govern banking institutions. Its total loans grew 15% in the second quarter of 2024. 

Much of American Express's recent growth has come from international activity, which has increased by 13%. It raised its guidance range for the entire year to $13.30 to $13.80, up from $12.65 to $13.15 previously, and is targeting revenue growth of 9% to 11% range for the year. On the most recent earnings call, Stephen Squeri said that while they may see some discretionary pullback, the U.S. consumer has been pretty consistent and thinks that will remain the case for the rest of the year. 

Berkshire Hathaway tends to shift its financial holdings depending on what it sees in the market. In 2020, it sold off shares in JPMorgan Chase JPM, PNC Financial Services PNC, and M&T Bank MTB. When the Silicon Valley Bank collapse roiled the markets in 2023, Berkshire Hathaway cut its shares in U.S. Bancorp USB and Bank of New York Mellon Corp BK. At that point, it added to its Bank of America shares and started a stake in Capital One COF. 

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Aside from financial stalwarts, Berkshire Hathaway has stakes in other financial companies. One of the most intriguing is Nu Holdings NU, a Latin American fintech company. While Berkshire Hathaway's stake in Nu Holdings is a modest 0.26% of its total portfolio, it represents an interesting take on where financials could be headed. Nu Holdings passed the 100 million customer mark earlier this year and is now the fourth-largest financial institution in Latin America. 

It's impossible to know why Berkshire Hathaway has decided to trim its position in Bank of America. It could see exposure to a weakening consumer market or other opportunities in the broader markets it wants to exploit. Despite the relatively large sale, this does not appear to signal any lack of faith in the financial services industry. We will have to wait until Berkshire Hathaway's next 13F filing to peer into the company's latest smaller financial trades. 

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