Is Wells Fargo’s Report Good News or Bad News?

In their most recent quarter, Citigroup and Bank of America’s numbers were down dramatically and with B of A seemingly not being a good value in terms of its earnings we would avoid that stock. JPMorgan Chase, meanwhile, reported considerably higher net income and it might be a good buy given its cheapness on both a book and earnings basis. US Bancorp carries trailing and forward P/Es of 12 and 11, respectively, placing it in value territory as well, and its most recent quarterly report (again, from Q3 2012) showed a 10% increase in revenue and a 16% increase in net income compared to the same period in 2011. We think it’s also worth considering.

The net interest margin news isn’t good, but overall we’re pleased with Wells Fargo’s report. The earnings multiples are low and the company continues to show good numbers on the bottom line. Some other large banks look like good values, and in the case of JPMorgan Chase that extends to a small discount to book value, but Wells Fargo should certainly be considered if an investor wants to buy a financial stock.