Warren Buffett has so far called a top on Bank of America's stock

By Tomi Kilgore

Buffett's Berkshire Hathaway has sold more than $5 billion worth of the bank's stock since the day after it closed at a two-year high

Shares of Bank of America Corp. have bounced nicely over the past few weeks, but they still have a long way to go before recovering what they have lost since Warren Buffett's Berkshire Hathaway Inc. started selling.

Bank of America's stock (BAC) rose 1% toward a four-week high in midday trading on Wednesday. It has run up 9.4% since it closed at a four-month low of $36.65 on Aug. 5. That low was hit as the broader market suffered its worst day in about two years amid growing fears over a slowing U.S. economy and the fallout from interest-rate increases in Japan.

The banking giant's stock still needs to rally another 10.1% from current levels to reach the July 16 close of $44.13, which was its highest close since March 22, 2022.

That closing high followed a 5.4% surge in the stock, its biggest gain of the year, after the bank reported second-quarter profit and revenue that beat expectations and provided an upbeat outlook for net interest income.

Basically, the stock has retraced 45.9% of the selloff of $7.48, or 16.9%, to the Aug. 5 low from the July 16 high.

Coincidentally, Berkshire Hathaway (BRK.B) (BRK.A), Bank of America's largest shareholder, started trimming its stake on July 17 and has continued to sell shares through Tuesday.

In multiple Form 4 filings with the U.S. Securities and Exchange Commission since July 19, with the most recent filed on Tuesday evening, Berkshire has disclosed that it sold a total of 129,051,630 Bank of America shares at a weighted average price about $41.51, to raise $5.36 billion.

Read: Warren Buffett's Berkshire Hathaway on cusp of joining $1 trillion club

To put the sales in perspective, the shares sold by Berkshire represented 10.2% of the total volume of shares traded - 1.27 billion shares - during the period to Aug. 27 from July 17.

The sales have trimmed Berkshire's stake, which stood at 1.033 billion shares as of June 30, by 12.5%.

Also read: As Warren Buffett sold Apple's stock, these funds bought in

Berkshire still owns 903.8 million of the bank's shares, or 11.65% of the shares outstanding, leaving Buffett's investment vehicle as by far the largest shareholder.

In second place was Vanguard Group, which owned 7.9% of Bank of America's shares outstanding as of June 30, according to FactSet data.

Despite the recent pullback, the stock has still rallied 19% year to date, while the S&P 500 SPX has advanced 17.2%.

-Tomi Kilgore

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08-28-24 1233ET

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