5 Best Holding Company Stocks To Invest In

4. Wells Fargo & Company (NYSE:WFC)

Number of Hedge Fund Holders: 77

Wells Fargo & Company (NYSE:WFC) is a diversified financial services holding company that provides banking, investment, mortgage, and consumer and commercial finance products and services in the United States and internationally. The company reported its Q4 2022 financial results on January 13, announcing a GAAP EPS of $0.67, beating estimates by $0.06. However, Wells Fargo & Company (NYSE:WFC)’s revenue of $19.66 billion missed Wall Street consensus by $380 million. 

On January 11, after Wells Fargo & Company (NYSE:WFC) disclosed a strategic realignment of its mortgage banking business that includes concluding the correspondent mortgage banking channel and trimming the size of the bank’s mortgage servicing portfolio, Morgan Stanley analyst Betsy Graseck said the shift “doesn’t move the EPS needle,”  and expects Wells Fargo & Company (NYSE:WFC) to redirect capital associated with correspondent mortgage banking to retail mortgage production. The analyst maintained an Overweight rating and a $58 price target on Wells Fargo & Company (NYSE:WFC) shares.

According to Insider Monkey’s Q3 data, 77 hedge funds were bullish on Wells Fargo & Company (NYSE:WFC), compared to 83 funds in the prior quarter. Boykin Curry’s Eagle Capital Management is the biggest stakeholder of the company, with more than 23 million shares worth $928 million. 

Here is what Oakmark Funds specifically said about Wells Fargo & Company (NYSE:WFC) in its Q3 2022 investor letter:

“Wells Fargo & Company (NYSE:WFC) has been a long-time holding in the Oakmark Fund. Despite the positives of higher interest rates and the company making good progress on reducing expenses and regulatory consent orders, Wells Fargo shares have fallen one-third from their highs earlier this year to roughly 6.5x our estimate of normalized earnings power, and the stock ended the quarter at ~1x next year’s tangible book value. We find this is far too cheap for a strong banking franchise capable of tangible returns in the low-to-mid teens across business cycles.”