Billionaire Warren Buffett Sold 39% of Berkshire's Stake in Bank of America and Is Loading Up on a Famed Consumer Brand That's Skyrocketed 7,700% Since Its IPO

Berkshire Hathaway's recent 13F filings reveal Warren Buffett continued to reduce his stake in Bank of America (BAC) for the third consecutive quarter, decreasing his holdings by 39% since July 2024, potentially due to profit-taking or concerns about BofA's interest rate sensitivity and valuation. Simultaneously, Buffett increased Berkshire's position in Domino's Pizza (DPZ), now owning a 7.7% stake, citing the company's trustworthy brand, consistent growth strategies, and capital-return program as key factors.

Analysis

Berkshire Hathaway's first-quarter 13F filings, disclosed in May, reveal significant portfolio adjustments by Warren Buffett, coinciding with his announced departure as CEO at year-end. Notably, Buffett has continued to reduce Berkshire's stake in Bank of America (BAC) for the third consecutive quarter, a trend reportedly beginning July 17, 2024. This selling has decreased the holding by over 401 million shares, or 39%, moving BAC to the fourth-largest position in Berkshire's $276 billion portfolio. Potential drivers for this divestment include profit-taking from a highly successful 2011 investment (exercised in 2017 at $7.14 per share), concerns over BAC's heightened sensitivity to net interest income declines in a potential rate-easing cycle, and its current valuation trading at a 20% to 30% premium to book value, nearing its highest since prior to the Great Recession. This contrasts with its 62% discount to book value in August 2011. Conversely, Buffett has consistently increased Berkshire's investment in Domino's Pizza (DPZ) for three straight quarters, accumulating 2,620,613 shares, representing a 7.7% stake valued at over $1.2 billion as of March 31, 2025. The rationale for this growing position in the consumer brand, which has delivered nearly 7,700% total return since its 2004 IPO, includes Domino's strong brand trust built on transparency (exemplified by its 2009 campaign), consistent execution of multiyear growth strategies like the current "Hungry for MORE" initiative, and a robust capital-return program featuring 12 consecutive years of dividend increases and share buybacks. The overall sentiment for BAC is negative (-0.7), while for DPZ it is positive (+0.8), reflecting these strategic shifts.

Key Decisions for Investors

• Investors should critically evaluate their Bank of America (BAC) positions, considering Berkshire's sustained selling, potential headwinds from interest rate changes, and current valuation levels relative to historical norms.
• Domino's Pizza (DPZ) warrants consideration for portfolios focused on quality consumer brands with proven growth strategies and shareholder-friendly capital return policies, given Buffett's increasing conviction.
• Monitor Berkshire Hathaway's subsequent 13F filings to track the evolution of these positions and identify further shifts in investment strategy, particularly in light of the upcoming CEO transition.
• Note that while Buffett is bullish on Domino's Pizza, some market analysts, like The Motley Fool Stock Advisor team, do not currently rank it among their top 10 best buys, suggesting a balanced view and further due diligence may be beneficial.