Insider Moves: Berkshire Hathaway Inc. (BRK.A) Exercises Warrants to Acquire Bank of America Corp (BAC) Common Stock


Bank of America Corp (NYSE:BAC) announced that Berkshire Hathaway exercised its warrants to purchase 700 million shares of Bank of America common stock using the Series T preferred shares Berkshire Hathaway acquired through its investment in Bank of America in 2011.

As a result, the number of Bank of America common shares outstanding has increased. However, there will be no effect on future diluted earnings per common share as this warrant exercise has been previously included in the company’s diluted earnings per share calculation.

“In 2011, we welcomed Berkshire Hathaway as a shareholder, and we appreciate their continued support now as our largest common shareholder,” said Bank of America Chief Executive Officer Brian Moynihan.

Shares of Bank of America closed today at $23.58, down $0.14 or -0.59%. BAC has a 1-year high of $25.80 and a 1-year low of $14.81. The stock’s 50-day moving average is $24.19 and its 200-day moving average is $23.86.

On the ratings front, BAC has been the subject of a number of recent research reports. In a report issued on August 25, Baird analyst David George reiterated a Hold rating on BAC, with a price target of $24, which represents a slight upside potential from current levels. On August 23, BMO’s James Fotheringham reiterated a Hold rating on the stock and has a price target of $27.

According to TipRanks.com, which ranks over 7,500 financial analysts and bloggers to gauge the performance of their past recommendations, David George and James Fotheringham have a yearly average return of 8.7% and 15.4% respectively. George has a success rate of 71% and is ranked #674 out of 4619 analysts, while Fotheringham has a success rate of 80% and is ranked #117.

Sentiment on the street is mostly bullish on BAC stock. Out of 12 analysts who cover the stock, 9 suggest a Buy rating and 3 recommend to Hold the stock. The 12-month average price target assigned to the stock is $27.5, which represents a potential upside of 18% from where the stock is currently trading.

 

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