Berkshire's Abel Sells BAC for 7th Quarter, Adding Selling Pressure

What happened

Greg Abel, Warren Buffett's successor at Berkshire Hathaway, continued selling Bank of America shares in Q1, marking the seventh consecutive quarter of divestment. This persistent selling, revealed by a decline in Berkshire's cost basis in financial stocks, adds a tangible headwind as BAC trades at $54.3, near the top of our 'Trim Above $60' zone. Our DeepValue report maintains a WAIT rating with 2.5 conviction, citing reliance on NII tracking +5-7% YoY and expense deceleration. The Berkshire selling does not alter the fundamental thesis but reinforces caution: the stock lacks a margin of safety at current levels, and a large informed seller's ongoing exit pressures valuation.

Implication

While Berkshire's exit is a negative signal, BAC's earnings power and capital return remain intact if NII stays within guidance and expenses slow. A pullback toward our $48 attractive entry could be a buying opportunity, but wait for Q2 and Q3 prints to validate the thesis.

Thesis delta

The thesis shifts from a neutral wait for earnings confirmation to a more cautious stance, as Berkshire's persistent selling introduces a new supply-side headwind. Previously, the call hinged solely on operational metrics (NII, expenses, credit). Now, the market must also absorb continued insider selling from a highly influential holder, lowering the probability of a near-term re-rating even if fundamentals meet expectations.