Warren Buffett Stock Portfolio: Top 5 Stock Picks

2. Bank of America Corporation (NYSE:BAC)

Value of Berkshire Hathaway‘s 13F Position: $30.5 Billion

Number of Hedge Fund Shareholders: 101

Warren Buffett still owns just over 1.01 billion shares of Bank of America Corporation (NYSE:BAC) as of September 30, the same amount he’s owned for the last two years. The value of his position has risen by over $6 billion during that time. Bank of America fell to an all-time low in hedge fund ownership a year ago, but has rebounded by 31% since then. Louis Bacon’s Moore Global Investments added BAC to its 13F portfolio during Q3.

Bank stocks were a favorite investment of Buffett’s for a long time, but no longer have the same honored place in his portfolio. One of the exceptions is Bank of America Corporation (NYSE:BAC), which ranks as Berkshire’s second-largest 13F holding. He held BAC shares for several years in the 2000’s before selling off his stake in late 2010, but bought back into the company in the third quarter of 2017 and has gradually added more shares to his holding in the years since.

Bank of America will benefit more from rising rates than many other banks given its relatively high sensitivity to them, with the company’s net interest income expected to grow at a CAGR of 16% between 2022 and 2023. In the September quarter, BoA’s net interest income soared by $2.7 billion year-over-year to $13.9 billion. That figure is expected to approach or top $18 billion in a year.

Diamond Hill Capital Management shared its thoughts on Bank of America Corporation (NYSE:BAC)’s recent share price weakness in the fund’s Q2 2022 investor letter:

“Bank of America Corporation (NYSE:BAC) shares were weak in Q2 as the market became increasingly focused on the possibility of a near-term recession and the potential for credit losses along with current fee revenue pressures.”