Should You Forget Bank of America and Buy This Magnificent Bank Stock Instead?

Core Viewpoint - Warren Buffett's investment in Bank of America remains significant despite recent sales, while American Express has overtaken it as the second-largest position in Berkshire Hathaway's portfolio, indicating a shift in preference towards American Express [1][2]. Group 1: Bank of America - Bank of America stock constitutes 10% of Berkshire Hathaway's total portfolio, making it the third-largest position [1]. - Recent sales of Bank of America stock by Buffett have led to speculation about his confidence in the stock, but it still holds a substantial position in his portfolio [1]. Group 2: American Express - American Express has become the second-largest position in Berkshire Hathaway's portfolio, accounting for 13.1% [2]. - The company has evolved beyond just a credit card issuer, functioning as a bank with a focus on digital financial services and small business solutions [3]. - American Express operates a closed-loop credit card network, allowing it to fund its own credit cards, which provides greater control and multiple revenue streams [4]. Group 3: Financial Performance - American Express reported a 44% year-over-year increase in net income in the second quarter, with a 21% increase excluding sale proceeds [6]. - The company has raised its earnings per share (EPS) guidance for the full year from approximately $12.90 to $13.50 [6]. - American Express has a dividend yield of 0.96%, which is lower than usual due to its strong stock performance, having increased by 46% this year, outperforming the S&P 500 [7].