4. Wells Fargo & Company (NYSE:WFC)
Number of Hedge Fund Holders: 93
P/E Ratio as of May 26: 9.48
Wells Fargo & Company (NYSE:WFC), an American diversified financial services company offering banking, investment, mortgage, and commercial finance products and services, is one of the top value stocks that hedge funds are buying in 2022. The stock’s price to earnings ratio on May 26 came in at 9.48.
On April 26, Wells Fargo & Company (NYSE:WFC) declared a quarterly dividend of $0.25 per share. The dividend is payable on June 1, to shareholders of record on May 6. Wells Fargo & Company (NYSE:WFC) posted on April 14 its Q1 2022 results, reporting earnings per share of $0.88, beating market consensus estimates by $0.07.
Barclays analyst Jason Goldberg raised the price target on Wells Fargo & Company (NYSE:WFC) on April 18 to $64 from $62 and kept an Overweight rating on the shares after the Q1 results. The analyst increased his 2022 net interest income and loan growth outlook while keeping the expense projections unchanged despite Q1 coming in higher than expected.
According to Insider Monkey’s database, 93 hedge funds were bullish on Wells Fargo & Company (NYSE:WFC) at the end of March 2022, with combined stakes worth $6.8 billion. Patrick Degorce’s Theleme Partners is the biggest position holder in Wells Fargo & Company (NYSE:WFC), with 18.2 million shares worth $884.7 million.
Here is what Davis Opportunity Fund has to say about Wells Fargo & Company (NYSE:WFC) in its Q4 2021 investor letter:
“The absolute level of revenues and profits generated by such companies is in fact so large that most of the major financial holdings in the portfolio produce enough annual operating income individually that a number of them could, in theory, purchase several entire businesses among hundreds of choices within the S&P 1500 Index, using just a year’s cash earnings without dipping into capital. This is theoretical, as financial companies would not be in the business of buying healthcare or technology companies, for example, but we point out these facts to illustrate the sheer scale of the economics produced by single financial companies in a given year, which is often a multiple of the cash earnings yielded by companies in a host of other industries.
Given this cash-generation power, we are naturally drawn to what we believe are strong and profitable financial institutions when the price is right. Presently, we believe the valuations of our financial holdings are not only reasonable, but extremely compelling, and our portfolio composition reflects this view. Representative financial holdings in the Fund include Wells Fargo.”
