5 Blue Chip Stocks to Buy According to Mario Gabelli

2. Bank of America Corporation (NYSE:BAC)

Number of Hedge Fund Holders: 99

Mario Gabelli’s Stake Value: $48,969,000

Percentage of Gabelli’s Portfolio: 0.44%

Stock Price as of June 15: $33.17

Bank of America Corporation (NYSE:BAC) is another diversified financial services company on our list. Warren Buffett’s Berkshire Hathaway Inc is the biggest shareholder in the Charlotte, North Carolina-based firm, with an ownership of 11.45%

Despite the increase in interest rate, Bank of America Corporation (NYSE:BAC) is trading at a conservative forward multiple of 10x. The conservatism is because investors are factoring in the possibility of a recession ahead. However, the generous dividend outlay and the aggressive share buyback would result in an expansion of multiples, which would provide potential upside to investors.

Chris Kotowski at Oppenheimer had given Bank of America Corporation (NYSE:BAC) a target price of $50 with an Outperform rating on May 3. The analyst pointed toward the loan growth and rising interest rate as positive catalysts. Furthermore, Kotowski added that if the economy enters into a recession, the banks are most prepared for such an outcome.

Bank of America Corporation (NYSE:BAC) was mentioned by Aristotle Capital Management in its Q1 2022 investor letter. Here’s what the asset management firm said about the company:

“We first invested in Bank of America during the second quarter of 2013. During our near decade as investors, Bank of America closed the chapter on the legacy issues from acquired Countrywide, including mortgage write-downs and substantial legal charges. In addition, it successfully turned the Merrill Lynch franchise into one of the leading U.S. brokerage and advisory firms. Thanks to what we consider to be a strong management team led by CEO Brian Moynihan, the bank went through years of simplification, improved its cost structure and efficiency ratio, and reduced risk. While we believe Bank of America remains a much-improved market leader, we decided to exit our position and use the proceeds to invest in Brookfield Asset Management.”

As of Q1 2022, 99 funds held a stake in Bank of America Corporation (NYSE:BAC).