If any investor has stood the test of time, it is Warren Buffett. For years, the “Oracle of Omaha” has had a rock-star-like presence in the investing world. His annual Berkshire Hathaway shareholders meeting draws literally thousands of loyal fans who are investors. Known for his long buy-and-hold strategies and his massive portfolio of public and private holdings, he remains one of the preeminent investors in the world.
With the market churning back and forth this year, up 2% and then back down 2%, while interest rates rise and inflation rages at the highest levels in 40 years, something will have to give at some point.
The chatter across Wall Street from economists, equity strategists and, of course, the financial news teleprompter readers is that when it comes to a recession, it is not a matter of if anymore, it is a matter of when. The definition of a recession is two consecutive quarters of negative gross domestic product. First-quarter GDP decreased at an annual rate of 1.5%. Should that happen in the second quarter, that would place the economy in recession now.
Recently interest rates shot to their highest levels across the Treasury curve since 2019, with the five-year and 10-year notes and the 30-year bond all trading at a 3% or higher yield. While yields closed lower on Tuesday, this still does not bode well for the stock market. The old saying “don’t fight the Fed” works in both directions. We decided to screen the Berkshire Hathaway list of stocks for those that are mostly immune to higher interest rates. These seven look like outstanding ideas now.
It is important to remember that no single analyst report should be used as a sole basis for any buying or selling decision.
Bank of America
This company posted very solid first-quarter results, and Warren Buffett owns a stunning 1.1 billion shares. Bank of America Corp. (NYSE: BAC) is a ubiquitous presence in the United States, providing various banking and financial products and services for individual consumers, small and middle-market businesses, institutional investors, corporations and governments in the United States and internationally. It operates 5,100 banking centers, 16,300 ATMs, call centers and online and mobile banking platforms.
Bank of America has expanded into several new U.S. markets, with scale across the country positioning it ideally to benefit from accelerating loan growth over the next two years. Moreover, unlike smaller peers, scale allows the bank to increase investment substantially over the next few years without notably jeopardizing returns, driving further market share gains.
Shareholders receive a 2.31% dividend. Goldman Sachs has a $51 target price on Bank of America stock. The analysts’ consensus price target is $48.28. The shares ended Tuesday trading at $36.35.
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