Warren Buffett has sold 34% of Berkshire Hathaway’s stake in Bank of America and shifted his focus to Domino’s Pizza. Domino’s stock has soared 7,600% since its initial public offering.
Buffett is known as the “Oracle of Omaha.” He has an exceptional track record. Under his leadership, Berkshire Hathaway has achieved a return of over 5,815,000% since the mid-1960s. This vastly outperforms the S&P 500.
A recent SEC filing revealed that Buffett’s company sold more than 352 million shares of Bank of America stock between mid-2024 and December 31, reducing Berkshire’s position by 34%. Various factors could influence this move.
These include potential corporate income tax rate changes and shifts in Federal Reserve monetary policy. Bank of America benefited from rising interest rates between March 2022 and July 2023.
Buffett’s strategic focus on Domino’s
However, the current rate-easing cycle could pose challenges, such as declining net interest income. Additionally, the bank’s stock is not as attractively valued as it was when Buffett initially invested in it in 2011. In contrast, Buffett has shown increasing interest in Domino’s Pizza.
By the end of 2024, Berkshire Hathaway had acquired a $1.1 billion stake in the company. Domino’s has demonstrated a remarkable turnaround over the past 15 years, anchored by innovative marketing and a consumer-centric growth strategy.
The company’s “Domin-ATE” strategy, introduced in 2023, focuses on new products, tech-driven efficiency, loyalty rewards, and franchisee engagement, contributing to steady sales growth. Domino’s has also achieved significant international expansion, with 31 consecutive years of same-store sales growth outside the U.S. Additionally, consistent dividend payouts and share repurchases enhance the company’s attractiveness to value investors like Buffett.
While the stock is not cheap, trading at 27 times consensus earnings per share for 2025, Buffett’s deep understanding of consumer habits likely factors into his confidence in Domino’s long-term potential. This strategic shift from Bank of America to Domino’s Pizza highlights Buffett’s ability to navigate changing market conditions and identify promising investment opportunities.
