5 Best Spring Stocks To Buy Now

4. Bank of America Corporation (NYSE:BAC)

Number of Hedge Fund Shareholders: 95

Bank of America Corporation (NYSE:BAC) is only about half as popular among hedge funds as it was six years, but has maintained relatively flat levels of hedge fund ownership over the past three years. Warren Buffett’s Berkshire Hathaway and Ric Dillon’s Diamond Hill Capital are two of biggest Bank of America shareholders in our database, with Berkshire owning over 1.03 billion shares.

According to Bank of America Corporation (NYSE:BAC)’s Q1 2023 Earnings Call Transcript, payments from customers’ accounts grew by 9% in March and by 8% during Q1, and the investment bank characterized their financial position as relatively healthy. The bank’s overall revenue rose by 13% during Q1, while its net interest income was up by 25%. In contrast to the small deposit flight from Charles Schwab in Q1, Bank of America further noted that about 80% of its deposit balances in the U.S. are held by customers who’ve been with the company for at least a decade.

Oakmark Equity and Income Fund believes Bank of America Corporation (NYSE:BAC) to be one of the best managed companies in the finance sector, as it revealed in its Q1 2023 investor letter:

“The Oakmark Equity and Income Fund has 29% of its equity portfolio in financials. This made the March sell-off painful, but we do not believe that this has meaningfully changed the value of most of our financial equity holdings. In fact, we were adding to financial positions throughout March. We believe that one way to analyze our financial holdings is to look at them in different buckets given their various business models and risk profiles. Almost 30% of our financial exposure is in insurance companies and insurance brokers. Insurance companies have very stable liability profiles, so the main risk is a change in asset values. We are comfortable with their investment portfolios and think these stocks are quite attractive. Around 5% of our financials are asset managers. This leaves a little over 40% of the financials exposure in a varied group of banks and lenders. About 5% of that portfolio is in Bank of America Corporation (NYSE:BAC) and State Street. These two banks are designated as Systematically Important Financial Institutions and are held to higher regulatory standards. Our largest single financials holding is Bank of America, which has grown deposits during March, and we believe it is one of the best managed companies in the sector.”