Warren Buffett's Berkshire Hathaway has extended its lead as the largest shareholder of the Bank of America. A Form 3 filing with the Securities and Exchange Commission late last week revealed that the billionaire philanthropist has increased his company's stake in the Bank of America to more than 10 percent, or more than $29 billion.
The form revealed that Berkshire Hathaway now holds around 950 million shares of Bank of America. The amount of shares is equivalent to more than 10 percent of the bank's common shares outstanding.
The stake specified in the form is significantly higher than the 896.2 million shares that were previously disclosed by the investment firm. Berkshire previously revealed its stake, which was around 9.4 percent of the shares outstanding, back in March of this year.
The new data essentially solidifies the investment firm's lead as the bank's largest shareholder.
The second-largest shareholder still remains to be the Vanguard Group, which has a 6.4 percent stake in the bank. Vanguard is followed closely by SSgA Fund Management, which currently has a 4.1 percent stake.
Berkshire Hathaway's stake in the Bank of America is currently its largest bank holding. As reports of Berkshire's stake were made public, Bank of America shares surged by more than 1.6 percent by the end of last week. At current prices, Berkshire's holding with the Bank of America is valued at around $29.30 billion.
That amount is significantly larger than the investment firm's second-largest bank holding, namely its shares of Wells Fargo valued at around $20.18 billion at current prices. The company's filing has revealed that Berkshire's holding of Wells Fargo common stocks has declined, from 442.4 million shares in September 2018 to 426.8 million shares in December 2018.
Buffet's relationship with the Bank of America was cemented when Berkshire exercised its warrants as part of a deal it had made in 2011. Buffet invested around $5 billion in preferred stock with the bank, which promised to pay a 5 percent annual dividend.
The deal was struck when the bank was still having trouble recovering from the global financial crisis in 2008.
Berkshire's holdings were also significantly boosted when analysts upgraded the Bank of America's ratings from market perform to outperform.
This essentially raised stock price targets from $32 to $36, as analysts expected the bank to benefit from the improved economic outlook based on expected interest rate cuts by the Federal Reserve. Bank of America stocks had gained more than 1.6 percent in the first three months of the year.
