Billionaire Warren Buffett Sold 34% of Berkshire's Stake in Bank of America and Is Piling Into a Beloved Consumer Brand That's Soared 7,600% Since Its IPO

Though Wall Street is home to more than a dozen prominent billionaire money managers, none captivates the attention of professional and everyday investors quite like Berkshire Hathaway's (NYSE: BRK.A)(NYSE: BRK.B) CEO Warren Buffett.

Investors flock to the "Oracle of Omaha" for two reasons. First, he's crushed the benchmark S&P 500 since becoming CEO of Berkshire Hathaway six decades ago. Whereas the S&P 500 has delivered an impressive 40,633% return, including dividends, since the mid-1960s, Buffett has overseen a cumulative return in his company's Class A shares (BRK.A) that tops 5,815,000%, as of the closing bell on Feb. 14.

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Secondly, investors appreciate Buffett's candidness and open-book approach. Whether he's speaking to 40,000 people at Berkshire's annual meeting or writing his annual letter to shareholders, Berkshire's chief is willing to share the characteristics he looks for in wonderful companies.

But there are other ways to pick Warren Buffett's brain.

Berkshire Hathaway CEO Warren Buffett. Image source: The Motley Fool.

No later than 45 days following the end to a quarter, institutional investors with at least $100 million in assets under management (AUM) are required to file Form 13F with the Securities and Exchange Commission (SEC). This filing, which was due on Feb. 14, provides a snapshot of which stocks Wall Street's brightest money managers bought and sold in the latest quarter. With Buffett overseeing nearly $299 billion in AUM at Berkshire Hathaway, his company's 13F allows investors an under-the-hood look at what he's been up to.

Based on the latest filing, billionaire Warren Buffett has been on a selling spree with Berkshire's No. 3 holding, and has now established a greater-than-$1.1 billion stake in a beloved consumer brand that's skyrocketed by 7,600%, including dividends, since its initial public offering (IPO).

Buffett has dumped more than 352 million shares of Bank of America

Although no Buffett stock was sold more aggressively in 2024 than Berkshire Hathaway's top holding, Apple, money-center giant Bank of America (NYSE: BAC) isn't too far behind. Between July 17 -- a specific date we know, thanks to Form 4 filings with the SEC -- and Dec. 31, Buffett oversaw the sale of 352,618,419 shares of BofA stock, which reduced his company's position by 34%.

During Berkshire's annual shareholder meeting in May, Buffett intimated that the peak marginal corporate income tax rate was likely to climb from 21%. Therefore, he believed that locking in sizable unrealized gains at an advantageously low rate would, in hindsight, be viewed as a wise move by Berkshire's shareholders. While Buffett was specifically alluding to share sales in Apple when making this point, it's possible the selling activity in Bank of America may be nothing more than tax-based.

Then again, Buffett might also have worrisome reasons for slashing more than a third of his company's stake in BofA.

For instance, Bank of America's interest rate sensitivity can be a catalyst or crutch, depending on the Federal Reserve's monetary policy. When the nation's central bank increased the federal funds rate at the fastest pace in four decades from March 2022 to July 2023, none of America's largest banks by assets benefited more than BofA. But with the Fed now in the midst of a rate-easing cycle, BofA's net interest income declining at a faster pace is also a possibility.

There are valuation concerns, as well. When Buffett initially acquired $5 billion in preferred BofA stock in August 2011, Bank of America's common stock was valued at a 62% discount to book value. As of the closing bell on Feb. 14, it was valued at a 31% premium to book. Buffett is an unwavering value investor and tends to back away from great businesses if there's no longer a clear value proposition.

It's worth mentioning that Buffett has been a net seller of equities for nine consecutive quarters. While Bank of America stock is certainly pricier, relative to book, than it's been over the last decade, the stock market as a whole is at one of its priciest levels in 154 years. Berkshire's chief hasn't been shy about raising cash in an environment where value is difficult to come by.

Image source: Getty Images.

The Oracle of Omaha wants a bigger slice of this leading consumer brand

Despite selling more in stocks than he's purchased for a ninth straight quarter (Oct. 1, 2022 through Dec. 31, 2024), the Oracle of Omaha has been putting his company's capital to work in a select few names. One of these top purchases is beloved consumer brand Domino's Pizza (NASDAQ: DPZ).

As of June 30, Buffett's company didn't hold a single share of Domino's. Six months later, when 2024 came to a close, Berkshire owned 2,382,000 shares, worth more than $1.1 billion.

Domino's Pizza possesses a trait that Berkshire's chief truly appreciates: trust. More than 15 years ago, Domino's marketing campaign plainly stated that its product was subpar and laid out its plan to win back consumers. While the mea culpa approach doesn't always work, the company's transparent advertising has worked wonders. Buffett is a firm believer in strong management teams and brand-name companies that have successfully built trust with consumers over time.

Another factor that's played a critical role in the resurgence of Domino's Pizza is its innovation (both inside and out of the box). The company's "Hungry for MORE" initiative, which was introduced in 2023, is a five-year growth strategy that promotes new products and tech-driven operating efficiency, as well as relies on loyalty rewards and its franchisees to build up the Domino's brand. The strategy appears to be paying off, with sales growth hovering around 6% on an annual basis.

The power of the Domino's brand can also be seen in its efforts to expand internationally. The company's third-quarter operating results, released in October, point to an expected 31st consecutive year of international same-store sales growth. Domino's Pizza has a steady growth runway beyond domestic borders.

Last but not least, Domino's Pizza has a healthy capital-return program, which is something Buffett often looks for in his investments. Domino's board has been increasing its base annual payout for more than a decade, and the company repurchases its own stock somewhat regularly. For companies with steady or growing net income, share buybacks can lift earnings per share (EPS) and make their stock more attractive to fundamentally focused investors.

While Domino's Pizza isn't exactly cheap -- 27 times consensus EPS for 2025 -- Buffett understands consumer buying habits better than most investors.

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Bank of America is an advertising partner of Motley Fool Money. Sean Williams has positions in Bank of America. The Motley Fool has positions in and recommends Apple, Bank of America, Berkshire Hathaway, and Domino's Pizza. The Motley Fool has a disclosure policy.