Is it Still Safe to Invest in Wells Fargo (WFC)?

L1 Capital, an investment management firm, published its ‘L1 Long Short Fund Limited’ fourth quarter 2021 investor letter – a copy of which can be downloaded here. A quarterly net return of -1.7% was recorded by the fund for the fourth quarter of 2021, underperforming its S&P ASX 200 AI benchmark by -3.8%. The benchmark meanwhile had a 2.1% gain for the same period. Spare some time to check the fund’s top 5 holdings to have a clue about their top bets for 2022.

L1 Capital Long Short Fund Limited, in its Q4 2021 investor letter, mentioned Wells Fargo & Company (NYSE: WFC) and discussed its stance on the firm. Wells Fargo & Company is a San Francisco, California-based financial services company with a $226.5 billion market capitalization. WFC delivered a 21.53% return since the beginning of the year, while its 12-month returns are up by 73.90%. The stock closed at $58.31 per share on February 11, 2022.

Here is what L1 Capital Long Short Fund Limited has to say about Wells Fargo & Company in its Q4 2021 investor letter:

“Detailed, bottom-up stock research remains the investment team’s primary focus and the core driver of portfolio performance. 2021 once again demonstrated the team’s ability to identify ‘winners’ through extensive company and industry research across a diverse range of sectors. Key contributors included Wells Fargo, (due to its) improving compliance and operational performance, falling bad debts and progress towards removal of ‘asset cap’. Exited our holding in June at a >50% gain.”

Our calculations show that Wells Fargo & Company (NYSE: WFC) failed to obtain a mark on our list of the 30 Most Popular Stocks Among Hedge Funds. WFC was in 88 hedge fund portfolios at the end of the third quarter of 2021, compared to 94 funds in the previous quarter. Wells Fargo & Company (NYSE: WFC) delivered a 14.42% return in the past 3 months.

In December 2021, we also shared another hedge fund’s views on WFC in another article. You can find other letters from hedge funds and prominent investors on our hedge fund investor letters 2021 Q4 page.

Disclosure: None. This article is originally published at Insider Monkey.