Warren Buffett More Than Tripled His Position in This Stock. Is It a Buy?

In the first quarter of the year, Warren Buffett and his company Berkshire Hathaway initiated a small stake in the digital consumer bank Ally Financial (NYSE: ALLY), which is also a big auto lender. In the second quarter of the year, Berkshire more than tripled its position in the stock, purchasing more than 21 million shares in the quarter. Now, Berkshire's position in Ally amounts to 30 million shares valued at more than $1 billion, representing nearly 9% of the company. With Buffett and Berkshire buying heavily now, is Ally a buy? Let's take a look.

Interestingly, Buffett is piling into Ally as the Street is growing more bearish. After a strong second-quarter earnings report, a number of analysts downgraded the stock on concerns regarding funding and credit quality.

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Source Fool.com