Author Topic: BAC-WT - Bank of America Warrants  (Read 2324549 times)

CorpRaider

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Re: BAC-WT - Bank of America Warrants
« Reply #7530 on: August 01, 2020, 11:24:28 AM »
Are you all seeing $2.15 for consensus EPS estimates for 2021?  I am thinking about doing a little post on why Buffett might be buying this versus WFC.


changegonnacome

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Re: BAC-WT - Bank of America Warrants
« Reply #7531 on: August 01, 2020, 12:19:41 PM »
Are you all seeing $2.15 for consensus EPS estimates for 2021?  I am thinking about doing a little post on why Buffett might be buying this versus WFC.

Hey would love to see your thoughts.

In my model I have long run fair play of WFC at almost a double todays prices (but obviously alot of execution risk and chance it takes way longer than my prediction to get expenses, tech overhaul & asset cap taken care of.......I feel thats the risk in WFC.........time.......long enough and the return rate will mirror BAC but you took on more risk that Scharf doesn't get it done. He comes with stellar rep from JPM & Visa (BNY too short time) but in both cases think he was working in a franchise with tailwinds and executed well - WFC is a turnaround plain and simple...it takes stomach, resilience & focus over a long period of time. Not sure Scharf has been battle tested in that sense - lets see.

Like lots of things with Buffet - think he's see BAC vs. WFC as a better risk adjusted return.....btw see BAC as a 50% upside over the same  time horizon c. 3yrs

CorpRaider

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Re: BAC-WT - Bank of America Warrants
« Reply #7532 on: August 01, 2020, 08:01:44 PM »
I wasn't going to do anything fancy, just looking at EPS earnings yields on consensus 2022 estimates.  I get too bulled up and can become really anchored if I put in too much elbow grease on a name. 

I see like an 11% figure for BAC and approaching 14.70% for WFC (the WFC estimates don't seem to have anything heroic, just a return to like $4 which was kind of run-rate for the past 4 years...which have not been the greatest).

I think I end up the same place as you.  The potential returns are lower with BAC, but the probabilities of achieving those returns are a lot higher. 

The other possible explanation that I've considered is that he just likes the sector a lot at these prices (I think that is a pretty well supported by his overall portfolio and moves the last several years) and if he's going to be seen to be endorsing management/performance by making the big deal of going above the 10% threshold. He probably doesn't want to come in for a ton more WFC questions without a huge delta in the potential rewards. 

I dunno if there's enough for a post, maybe if I throw in some other good N.A. banks like USB and TD.
« Last Edit: August 02, 2020, 01:25:57 PM by CorpRaider »

Mephistopheles

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Re: BAC-WT - Bank of America Warrants
« Reply #7533 on: August 01, 2020, 09:04:01 PM »
He probably doesn't want to come in for a ton more WFC questions without a huge delta in the potential rewards. 


I speculate that the reason he sold off the amount of WFC he did was to take tax losses with plans to redistribute into BAC up to the new 24.9% threshold. The reward potential is worse for BAC but at least he gets the tax benefit from losses. He's probably not bearish on WFC at its current risk/reward. This also explains why Munger hasn't sold out his really low cost, $8.xx position at DJCO.

Now watch Buffett blow out of the entire WFC and I am proven wrong.

thepupil

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Re: BAC-WT - Bank of America Warrants
« Reply #7534 on: August 02, 2020, 04:41:23 AM »
He probably doesn't want to come in for a ton more WFC questions without a huge delta in the potential rewards. 


I speculate that the reason he sold off the amount of WFC he did was to take tax losses with plans to redistribute into BAC up to the new 24.9% threshold. The reward potential is worse for BAC but at least he gets the tax benefit from losses. He's probably not bearish on WFC at its current risk/reward. This also explains why Munger hasn't sold out his really low cost, $8.xx position at DJCO.

Now watch Buffett blow out of the entire WFC and I am proven wrong.

I agree that selling high cost tax lots could be a motivation, not THE motivation but certainly a factor.


valueinvesting101

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Re: BAC-WT - Bank of America Warrants
« Reply #7535 on: August 04, 2020, 03:19:13 PM »
It has been 3 working days since the last filing. Price level is still the same. Another 15-20 million share purchases in last 3 days?
« Last Edit: August 04, 2020, 08:15:46 PM by valueinvesting101 »

gfp

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Re: BAC-WT - Bank of America Warrants
« Reply #7536 on: August 04, 2020, 04:06:29 PM »
It has been 3 working days since last filing. Price level is still the same. Another 15-20 million share purchases in last 3 days?

Knowing Berkshire it won't be filed until like 8:20pm eastern time - they don't like to mess around with early filings

OracleofCarolina

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Re: BAC-WT - Bank of America Warrants
« Reply #7537 on: August 04, 2020, 06:49:31 PM »
Here it is

gfp

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Re: BAC-WT - Bank of America Warrants
« Reply #7538 on: August 04, 2020, 07:53:20 PM »
"Accepted
2020-08-04 20:59:51"

I swear they try to go for last filing of the day on stuff like this

LC

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Re: BAC-WT - Bank of America Warrants
« Reply #7539 on: August 04, 2020, 08:21:06 PM »
Who is selling I wonder
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