Wells Fargo & Co (WFC): A Look Back at The Bank’s Earnings History

Very few Wells Fargo & Co (NYSE:WFC) shareholders are bearish on the stock’s long-term outlook, at least partially because the largest shareholder of Wells Fargo as a percentage of their 13F portfolio has been Warren Buffett, with 19.96% (over $15 billion) as of 12/31/2012 according to Insider Monkey. Buffett continues to believe in Wells Fargo and has actually increased his holdings by 4% compared to the previous quarter which I think is reckless, but maybe that is exactly the reason why he owns Wells Fargo and I write about Wells Fargo.

Warren Buffett portrait

Theleme Partners manages over a cool billion, and is even more enthusiastic than Warren Buffett, having increased their Wells Fargo & Co (NYSE:WFC) holdings by 8% last quarter. The hedge fund is now 23.21% invested in Wells Fargo. Its second largest holding is American Express (NYSE:AXP), with a more reasonable 10.77%.

Stifel Nicolaus (NYSE:SF) has wanted you to buy Wells Fargo since 02/10/2013, and they believe the stock price will increase to $42, but with a 0% increase in sales, that seems a bit hard to accomplish. It is time to buy a small bank in a country not currently served by Wells Fargo and use its expertise, experience and big pockets to eat Citigroup Inc (NYSE:C)’s lunch.

I do not ask for much, just a small bank with annual sales of at least $200 million. The revenue estimates for 2Q 2013 are growing to $21.4 billion from $21.3 billion a year ago. However, last year they managed to disappoint shareholders.

There must be a cheap bank that issues credit cards to consumers in Pakistan, Romania, Turkey, Paraguay and Uruguay which Citigroup is leaving because it cannot make enough money in those markets.

Wells Fargo & Co (NYSE:WFC) does not need to make money in those markets, but let’s reduce earnings estimates for Q3 2013 to $0.93 and focus on long-term growth. This being said, we can do this instead of trying to please the financial analysts in the short-term with a $0.13 gain from a year ago.

Shareholders only need one extra penny each year.

What are they going to do? Sell Wells Fargo?

Only 9 companies in the world are more important than Wells Fargo according to Forbes and only 6 of them make more money than Wells Fargo & Co (NYSE:WFC). It is a lot easier to convince a retired basketball high school teacher to open a brokerage account in Saudi Arabia than in Mexico, but why compete against 61 banks in Saudi Arabia when you can compete against 6 banks in Mexico?

We’d like to present the revenues and earnings of the last four quarters in a simple manner, to help you decide if you should buy more shares or sell your current holdings of Wells Fargo & Co (NYSE:WFC).

(Data via WSJ/Dow Jones & Co.)

Let’s take look at the list.