Hedge Funds Were Right About These 5 Stocks in 2021

2. Wells Fargo & Company (NYSE:WFC) 

Number of Hedge Fund Holders: 88  

Year-to-Date Gain in Share Price: 61%  

Wells Fargo & Company (NYSE:WFC) is another large-cap bank that has performed exceptionally well this year. The outlook for 2022 remains rosy as well. Wells Fargo & Company (NYSE:WFC) is still trading far below future EPS potential and investors have the opportunity to pick shares up at a cheap price. Wells Fargo & Company (NYSE:WFC) has also continued to produce impressive bottom line results despite a lot of negative news around the firm regarding regulation and a Fed-imposed asset cap. 

Despite these headwinds, hedge funds remain bullish on Wells Fargo & Company (NYSE:WFC). At the end of the third quarter of 2021, 88 hedge funds in the database of Insider Monkey held stakes worth $6 billion in Wells Fargo & Company (NYSE:WFC). 

In its Q4 2020 investor letter, Davis Funds, an asset management firm, highlighted a few stocks and Wells Fargo & Company (NYSE:WFC) was one of them. Here is what the fund said:

“Detractors to performance relative to the index include financial services holdings such as Wells Fargo. While banks in general have suffered due to the recession and experienced credit losses, Wells Fargo also suffered from operational missteps. It is our expectation, however, that our bank holdings in general will benefit from stronger economic growth as the pandemic recedes; and we believe Wells Fargo in particular, will, over time, lower their costs and successfully grow their businesses.”