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5 Investors Betting Big on Bank of America (BAC) Stock


  • Bank of America (BAC) reported Q1 revenue of $26.39 billion and EPS of 94 cents, beating analyst estimates on both metrics.
  • Berkshire Hathaway (BRK-A, BRK-B) is the bank’s largest shareholder, with a 1.01 billion share ownership stake.
  • BAC stock is down by about 10% year-to-date.
BAC stock - 5 Investors Betting Big on Bank of America (BAC) Stock

Source: Tero Vesalainen / Shutterstock.com

Shares of Bank of America (NYSE:BAC) stock opened in the green but fell lower after the bank reported its first-quarter earnings. As of publication, BAC stock made it back into the green but just barely at 0.33%. Revenue tallied in at $26.39 billion, which beat the consensus analyst estimate of $25.13 billion. Adjusted EPS of 94 cents also beat the analyst estimate of 82 cents. Meanwhile, net income rose 15% year-over-year (YOY) to $8.2 billion.

“We maintained strong liquidity, ending the quarter with $904 billion of Global Liquidity Sources. Regulatory capital improved to $184 billion, and our CET1 ratio is nearly 100 basis points above our current minimum requirements,” said CFO Alastair Borthwick. “Capital strength allowed us to return $4 billion back to shareholders, and we continued to invest in our people and businesses.”

Similar to Charles Schwab’s (NYSE:SCHW) recent earnings report, net interest income for Bank of America increased significantly by 25% to $14.4 billion, which was aided by rising rates. Non-interest income totaled $11.8 billion, up by just 1% YOY.

Bank stocks have witnessed elevated volatility since the collapse of Silicon Valley Bank. This has caused many small bank customers to flee to larger, more reputable banks in a bid for capital safety. At the same time, rising rates have influenced many banking customers to store unused cash in money market funds instead of savings accounts. And as of the end of Q1, BAC’s total consumer banking deposits totaled $1.044 trillion, down from $1.048 trillion during Q4 and $1.088 trillion YOY.

5 Investors Betting Big on BAC Stock

Tracking institutional ownership is important, as these large investors provide liquidity and support for stocks. During Q4, a healthy 2,605 13F filers disclosed a stake in BAC. Among those filers, 117 own BAC in their top ten positions. Meanwhile, the institutional put/call ratio sits at 1.23, down from 1.4. That’s equivalent to 183.98 million puts and 149.25 million calls, implying a bearish options stance. With that in mind, let’s take a look at the top five shareholders of Bank of America:

  1. Berkshire Hathaway (NYSE:BRK-A, NYSE:BRK-B): 1.01 billion shares. Berkshire’s stake remained unchanged during Q4.
  2. Vanguard: 607.70 million shares. Vanguard added 5.24 million shares during Q4.
  3. BlackRock (NYSE:BLK): 471.84 million shares. BlackRock sold off 4.81 million shares during Q4.
  4. State Street (NYSE:STT): 297.87 million shares. State Street acquired 1.16 million shares during Q4.
  5. FMR: 243.92 million shares. FMR acquired 12.72 million shares during Q4.

On the date of publication, Eddie Pan did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.

Eddie Pan specializes in institutional investments and insider activity. He writes for InvestorPlace’s Today’s Market team, which centers on the latest news involving popular stocks.

Article printed from InvestorPlace Media, https://investorplace.com/2023/04/5-investors-betting-big-on-bank-of-america-bac-stock/.

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