Warren Buffett Sells Bank of America and Buys a Monster Stock Up 1,700% Since 2011

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Warren Buffett boasts an exceptional record in the financial world on Wall Street. His strategic, value-focused approach to investing transformed Berkshire Hathaway (BRK.A) (BRK.B), initially a modest textile mill, into a multi-trillion dollar enterprise. Over the past six decades since he assumed control, this stock has consistently delivered an impressive annual return of 20%.

Therefore, many investors keep tabs on the stocks that Buffett’s firm purchases and sells, and here are two notable transactions he executed in the initial quarter:

1. In the first transaction, Berkshire Hathaway increased its stake in Chevron Corporation (CVX) by purchasing additional shares worth $2.05 billion. This move added to Buffett’s long-standing commitment to the energy sector.

2. On the other hand, Berkshire sold all of its shares in HP Inc. (HPQ), a technology company, for approximately $4.2 billion. This sale marked the end of Berkshire Hathaway’s investment in HP Inc., which had been held for over four years.

  • Berkshire sold 48,660,056 shares of Bank of America (BAC), a stock up 520% since Buffett first took a stake in August 2011. The sale reduced the position 7%, but it’s still his company’s fourth-largest holding.
  • Berkshire added 238,613 shares of Domino’s Pizza (DPZ), a stock up 1,700% since August 2011. The purchase increased the position 10%, but it’s still one of his company’s smallest holdings.

Read on to learn more about Bank of America and Domino’s Pizza.

1. Bank of America

Bank of America holds a robust market presence across various financial sectors. It ranks second among U.S. banks based on total domestic deposits and third among investment banks in terms of fees earned. A significant portion of the company’s income comes from interest, specifically within consumer banking, making it highly responsive to changes in interest rates.

Bank of America is leveraging artificial intelligence (AI) to make operations more efficient and lower expenses. Their AI tool, named Erica, assists both businesses and individual clients in handling their finances, leading to a 50% decrease in service desk calls for employees. Additionally, the company employs generative AI for tasks such as scanning and summarizing market research, as well as aiding developers with coding projects.

Bank of America posted robust financial figures for the second quarter, with net interest income increasing by 7% to reach $14.7 billion. This growth was driven by a strong performance across loans, debt, and trading account assets. However, non-interest income saw only minimal growth as increased payment card and brokerage fees were largely balanced out by reduced investment banking and market making fees. In summary, GAAP earnings climbed 7% to $0.89 per share for each diluted share.

In a statement made for the press release, CEO Brian Moynihan explained that net interest income has increased for four straight quarters, which is indicative of eight successive quarters showing growth in deposits and a 7% increase in loans compared to last year. He also noted that consumers have shown resilience, exhibiting strong spending habits and maintaining good asset quality.

Bank of America is currently trading at a higher multiple (1.7 times) compared to its average over the past 10 years (1.5), and even reached 1.8 times in the first quarter. This relatively high valuation, along with the possibility of lower interest rates, might be the reasons behind Warren Buffett’s decision to reduce his holdings.

Nonetheless, investors on Wall Street predict profits for Bank of America shareholders: The midpoint target price of $54 suggests a potential increase of 14% from the present share price of $47.30.

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2. Domino’s Pizza

Domino’s Pizza holds the title of the largest pizza company globally, thanks to advancements like anywhere ordering and precise delivery, as well as strategic collaborations with services such as Uber and DoorDash. Additionally, the firm has enhanced its supply chain in recent times by transferring dough production to local facilities, ensuring a uniform customer experience across various outlets.

Moreover, Domino’s maintains its popularity with customers by consistently updating their menu items (such as parmesan-stuffed crust pizzas) and offering special promotions. The company often outperforms competitors like Papa John’s and Pizza Hut (which is part of Yum! Brands), in terms of growth in same-store sales. Domino’s also employs AI technology to predict online orders, ensure the accuracy of pizza orders, and extract insights from customer feedback on social media platforms.

In the first quarter, Domino’s Pizza revealed satisfactory financial outcomes, though falling slightly short of projected revenue figures. The revenue climbed by 2.5% to reach $1.1 billion, and GAAP earnings rose by 21%, amounting to $4.33 per diluted share. Notably, CEO Russell Weiner informed analysts that the company managed to capture more market share during the quarter, despite failing to meet their mid-term objectives tied to the “Hungry for More” objectives set in 2023.

Analysts on Wall Street predict Domino’s Pizza will see an annual growth in earnings of about 10% over a period of three to five years. Given that its current stock valuation is 27 times its earnings, some investors might consider it costly. However, I personally suggest holding off for a more favorable buying opportunity. Interestingly, most analysts have a different viewpoint: the average predicted price of $530 per share suggests a potential increase of 14% from the current share price of $66.

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2025-07-21 11:18