Billionaire Warren Buffett Sold 41% of Berkshire's Stake in Bank of America and Is Piling Into 2 Magnificent Stocks for a 4th Straight Quarter
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Form 13F filings allow investors to track the buying and selling activity of Wall Street’s premier money managers (including Warren Buffett).
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Berkshire Hathaway 13Fs shows that more than 427 million shares of BofA stock have been sold since the midpoint of 2024 — and profit-taking may not tell the entire story behind this selling.
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Meanwhile, Buffett has built 7.8% and 9.3% respective stakes in two businesses that are firing on all cylinders.
Few if any money managers captivate the attention of professional and everyday investors quite like billionaire Warren Buffett. Since taking the reins as Berkshire Hathaway‘s (NYSE: BRK.A)(NYSE: BRK.B) CEO six decades ago, he’s led his company’s Class A shares (BRK.A) to a cumulative gain of more than 6,100,000%, as of the closing bell on Aug. 29. When you outperform the benchmark S&P 500 by well over 6,000,000% in 60 years, you’re going to get noticed.
Though the aptly named “Oracle of Omaha” isn’t perfect, mirroring his trading activity has been a profitable strategy for decades. This can be done by tracking Buffett’s trades via quarterly Form 13F filings with the Securities and Exchange Commission.
Based on Berkshire Hathaway’s 13F for the June-ended quarter, Buffett has continued to pare down one of his core holdings, Bank of America (NYSE: BAC). But even though he’s been a net-seller of stocks for almost three years, to the aggregate tune of $177.4 billion, Buffett also purchased shares of two magnificent stocks for a fourth straight quarter.
At the midpoint of 2024, Bank of America, which is commonly known by its shorthand “BofA,” was Berkshire Hathaway’s second-largest holding by market value, with north of 1.03 billion shares held. One year later, Berkshire’s billionaire chief has overseen the sale of 427,584,631 shares of BofA, which reduced his company’s stake by 41%.
Some or all of this selling activity may have to do with Warren Buffett’s desire to take advantage of a historically low peak marginal corporate income tax rate. Buffett intimated during Berkshire’s annual shareholder meeting in 2024 that selling shares of Apple made sense given a favorable corporate income tax rate. Though BofA wasn’t specifically mentioned, Berkshire Hathaway was (and still is) sitting on a sizable unrealized gain in the company.
However, benign profit-taking may not encompass the entire story behind this 41% reduction over 12 months.
For instance, the Oracle of Omaha is a diehard value investor. When Berkshire initially received preferred shares of Bank of America in August 2011, its common stock was valued at a 62% discount to book value. As of this writing, BofA is trading at a 36% premium to its book value. While this isn’t exceptionally pricey for a money-center bank, it’s at the high-end of BofA’s price-to-book range since the Great Recession. In short, Buffett may no longer view Bank of America stock as a bargain.
The other potential concern has to do with the prospect of interest rate cuts by the Federal Reserve. No U.S. money-center bank is more sensitive to changes in interest rates than BofA. Whereas rising interest rates helped its interest income more than any other large bank, a rate-easing cycle could disproportionately weigh on its interest income.
Although the Oracle of Omaha has been selective with his purchasing activity since October 2022, a couple of top-performing businesses have held his attention. This includes fast-food restaurant chain Domino’s Pizza (NASDAQ: DPZ), which has been purchased every quarter over the last year:
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Q3 2024: 1,277,256 shares purchased
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Q4 2024: 1,104,744 shares purchased
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Q1 2025: 238,613 shares purchased
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Q2 2025: 13,255 shares purchased (2,633,868 total shares held)
In just one year, Berkshire Hathaway has built up a 7.8% stake in Domino’s Pizza — and there are a number of catalysts that explain this optimism.
To begin with, Domino’s has earned the trust of consumers. Its transparent marketing campaigns have openly admitted past mistakes and relied on innovation, loyalty programs, and quality food products to keep customers loyal to the brand.
Berkshire’s billionaire boss is also a huge fan of robust capital-return programs. Domino’s dividend has been growing on an annual basis for more than a decade, and share repurchases have occurred on a somewhat regular basis, which can help boost earnings per share (EPS). Domino’s has retired more than half of its outstanding shares since going public, thanks to its share repurchase program.
But perhaps the top selling point for Domino’s Pizza is its ability to meet or exceed its five-year growth initiatives. The latest venture, known as “Hungry for MORE,” leans on artificial intelligence as an asset to improve production and streamline the company’s supply chain. It also empowers franchisees to build up the brand and leans on loyalty rewards to keep existing customers within its ecosystem.
But Domino’s Pizza isn’t the only magnificent stock Warren Buffett has been piling into for four straight quarters. Even though it’s not a brand-name business, wholesale pool supplies and related equipment distributor Pool Corp. (NASDAQ: POOL), which has gained nearly 47,000% (including dividends) since its public debut, has been a popular buy for the Oracle of Omaha:
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Q3 2024: 404,057 shares purchased
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Q4 2024: 194,632 shares purchased
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Q1 2025: 865,311 shares purchased
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Q2 2025: 1,994,885 shares purchased (3,458,885 total shares held)
After more than doubling Berkshire Hathaway’s stake in Pool for two consecutive quarters, Buffett’s company now holds a 9.3% stake.
Warren Buffett is a fan of operating cash flow predictability, which is something that Pool often brings to the table. Once a homeowner puts in a pool, hot tub, or spa, they’re going to need supplies to maintain or repair them. This leads to a fairly steady stream of recurring revenue year after year.
To build on this point, Pool Corp. is a company that benefits immensely from the disproportionate nature of economic cycles — and Buffett knows it! This is to say that while recessions are a normal and inevitable aspect of the economic cycle, they’re traditionally short-lived.
Over the last eight decades, the average recession has resolved in 10 months, whereas the typical economic expansion sticks around for approximately five years. Long-winded periods of economic expansion encourage homeowners to buy hot tubs or put in pools, which brings in new recurring revenue streams for Pool.
To keep with the theme, Buffett is likely pleased with Pool’s capital-return program. It’s nearly doubled the amount spent on share buybacks through the first six months of 2025 ($160.6 million) compared to the comparable period last year ($84.5 million), and has raised its dividend with some degree of consistency for two decades.
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Bank of America is an advertising partner of Motley Fool Money. Sean Williams has positions in Bank of America. The Motley Fool has positions in and recommends Apple, Berkshire Hathaway, and Domino’s Pizza. The Motley Fool has a disclosure policy.
Billionaire Warren Buffett Sold 41% of Berkshire’s Stake in Bank of America and Is Piling Into 2 Magnificent Stocks for a 4th Straight Quarter was originally published by The Motley Fool