Warren Buffett sold $1.5 billion of Bank of America shares, possibly to take advantage of low tax rate.

From Nasdaq: 2024-07-24 04:17:00

Warren Buffett has been selling stocks for the past six quarters, with the latest being $1.5 billion worth of Bank of America shares. Despite the bank’s success, Buffett may be selling due to the stock being fully valued or to lock in gains at a favorable tax rate.

Buffett’s recent stock sales, including Apple shares, may be to take advantage of the current low tax rate. While he still sees potential in Apple, Bank of America’s future growth may not justify paying higher taxes on gains later, leading to the recent sale.

Bank of America’s stock fell as interest rates rose, impacting its net interest income. Management expects growth in the third and fourth quarters, positioning the bank well if the Fed cuts interest rates. With a price-to-book value of 1.25, Buffett’s sale seems more tax-driven than reflecting the company’s prospects.

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