Bretton Fund Gives Up On Realogy and Community Health Systems, Sticking With Wells Fargo

During the quarter ended September 30, Carter’s Inc. (NYSE:CRI) had a negative impact of 0.9% on Bretton Fund’s returns, but the fund said that they are not very concerned and that Carter’s stock is expected to pull back. The stock has good long term potential and short term declines are not worrisome. The number of funds from our database long Carter’s Inc. (NYSE:CRI) declined by four to 38 in the second quarter.

Even though Wells Fargo & Co (NYSE:WFC)’s stock is down by 17% year-to-date and lost 6% in the third quarter alond, Bretton is still bullish on the company and said that Wells Fargo’s stock is significantly undervalued. The fund noted the recent issues faced by Wells Fargo and said that even though the fine of $185 million is “immaterial”,the damage to the company’s reputation will be more expensive in the long run.

“Despite this transgression, the vast majority of what Wells Fargo does on a daily basis adds genuine value to its customers: loans for homes, loans for small businesses, financial advice, and checking and banking services. The decline in the stock price hurt the fund by 0.3% this quarter. We believe the stock remains significantly undervalued, though we are closely watching how the company responds to this setback,” Bretton said.

At the end of June, 88 funds from our database held stakes in Wells Fargo & Co (NYSE:WFC) worth about $28.44 billion in aggregate,which represented 11.80% of the company’s outstanding stock.

Finally, Realogy Holdings Corp (NYSE:RLGY), whose stock has lost nearly 37% year-to-date, also got booted from Bretton Fund’s portfolio. The fund eliminated its position in the stock, booking a 22.2% loss. The company is scheduled to announce its quarterly results on November 4 and the market expects EPS of $0.76 and revenue of $1.64 billion.  A total of 39 funds we track held shares of Realogy Holdings Corp (NYSE:RLGY) at the end of June, unchanged over the quarter.

Disclosure: none