Warren Buffett continues to plow millions into an existing stake in Bank of America, a signal that the legendary value investor is both prowling for bargains again and sticking to the script in the coronavirus stock market recovery.
Berkshire Hathaway bought roughly 16 million more shares of Bank of AmericaJuly 23-27, at an average price of just over 24, SEC filings show. That adds to 34 million shares picked up July 20-22, taking Berkshire's total stake to 998.1 million shares.
The purchases comes just weeks after the top banks set aside billions more to cover Main Street lending exposure and warned of a prolonged economic slump. Still, Buffett has been consistently optimistic about the U.S. economy and its ability to enrich investors over the long term.
Bank of America was already the No. 1 stock in Berkshire's stock investment portfolio by number of shares at the end of March. It also was second largest by dollar value after Apple(AAPL).
So far this year, Bank of America is also among the worst-performing stocks in Berkshire's investment portfolio, along with bank and airline stocks at large. The Berkshire chief first invested $5 billion in the bank's preferred stock and warrants in August 2011, at a time when it was still reeling from the 2008-2009 financial crisis.
Berkshire's bank-heavy portfolio also includes retail lenders Wells Fargo (WFC), its second biggest bank holding with 323 million shares owned, JPMorgan Chase (JPM) and U.S. Bancorp(USB) as well as Wall Street giant Bank of New York Mellon (BK).
Recent Warren Buffett Stock Moves
B-class shares of Berkshire Hathaway rose 1% to 194.12 on the stock market today. Berkshire stock is forming a cup-with-handle base with a 203.43 buy point within a larger consolidation, according to MarketSmith chart analysis. Bank of America stock is forming a base with a 29.11 entry. BAC stock added 0.9% to 24.36 on Wednesday.
Both stocks are still at the lows of their bases, below their 200-day lines, and have lackluster relative strength lines.
Buffett was criticized for sitting largely on the sidelines as markets cratered during this year's coronavirus pandemic. At roughly the same time, Berkshire's massive cash pile swelled to $137 billion.
However, Berkshire made a $10 billion deal for Dominion Energy (D) assets in early July, and exited four airline stocks in April including Delta Air Lines (DAL).
This article originally appeared on Investor's Business Daily.
