Warren Buffett's Berkshire Hathaway Inc (NYSE:BRK) (NYSE:BRK) has been steadily trimming its stake in Bank of AmericaCorp (NYSE:BAC), selling off $7.2 billion worth of shares since mid-July.
Warren Buffet Has Been Trimming Stake In BAC
Following the sale of 5.8 million shares for $228.7 million at an average price of $39.45 on Friday, Monday and Tuesday, Berkshire Hathaway's stake in Bank of America has decreased to approximately 11% of the company's total shares. Despite this reduction, Berkshire remains BAC's largest shareholder and trails behind Apple Inc (NASDAQ:AAPL) and American Express Co (NYSE:AXP) in Berkshire's top holdings.
Despite this aggressive selling spree, which has stretched over 12 consecutive sessions, Bank of America stock has only dipped about 1% since July. Year-to-date, however, the stock has gained 16.7%, slightly outperforming the S&P 500.
While some investors may see Buffett's move as a red flag, others might interpret the pullback as a buying opportunity. After all, Bank of America's fundamentals remain strong, and CEO Brian Moynihan seems unbothered by the Oracle of Omaha's recent sales.
At a recent conference, Moynihan reiterated his admiration for Buffett's savvy 2011 investment, which helped shore up the bank during a time of crisis.
"He's been a great investor for our company and stabilized it when we needed it," Moynihan said.
Read Also: Bank Of America CEO On Buffett's Share Retreat: 'I Don't Know What Exactly He Is Doing ... We Can't Ask'
Technicals: Bearish Now, Bullish Signs Emerging?
Currently, Bank of America's technicals are flashing mixed signals. The stock is trading at $39.06, below its five-day, 20-day and 50-day moving averages, signaling a bearish short-term outlook.
Chart created using Benzinga ProSpecifically, the eight-day and the 20-day SMAs at $39.58, point to more potential selling pressure. The stock trading below the 50-day SMA of $40.18 further indicates medium-term bearishness.
Chart created using Benzinga ProMeanwhile, the MACD at a negative 0.10 indicates bearish momentum, and the RSI of 45.08 suggests that BAC stock is neither overbought nor oversold.
However, long-term investors might see a glimmer of hope. With the stock price still above its 200-day moving average of $36.82, there's a bullish case to be made for a potential rebound.
As Buffett continues to reduce his stake, the key question remains: Is Bank of America still a "great investment" stock, or is it time to move on?
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Image created using artificial intelligence via Midjourney.
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