Lorne Steinberg Wells Fargo WFC-N HOLD Oct 07, 2013

She re-bought after they reported a great quarter this week, gaining market share in their non-interest income (investment banking, wealth management, credit cards) and their balance sheet is excellent. They have enormous room to catch up in their assets vs. peers.

Excellent growth rate. Prospects look strong for the company. Would be top US bank to pick at this time. Very strong balance sheet with good lending capabilities. Share price expected to continue to rise. Recent quarter results excellent - continue to beat expectations. Dividend very good and reliable. 

He's overweight financials, which benefit from a soft landing, steeper yield curve which drives their net interest income higher. WFC has managed expenses very well. There's more bang for you buck here vs. its peers.

Banks earnings happen next Wednesday: JPM, Goldman, Wells Fargo and Citi. He expects good reports from all. The expected increase in M&A will benefit all. These stocks are off their highs at very low PEs. He's been buying them.

They reported this week, missing slightly expectations on the top line, but beat huge on the bottom. Net interest income beat and brokerage commissions were up. Excellent credit quality and maintained their aggressive share buybacks. Management raised the forecast for net interest income.

Looks really good at these levels.

Tailwinds: no tariffs on US banks and they will be less regulated by Trump. Today, Morgan Stanley said WFC could be a huge winner with less regulation: better loan growth, trading revenues and lower expenses. He's bullish.

Friday kicks off bank earnings season, a sector that has been crushed, because Wall Street expects a downturn in the economy. WFC was doing well into it slammed into Trump's tariffs. The CEO will have to be cautious on Friday; he has no choice. But shares won't rally on that sentiment.

Was downgraded today. WFC just got out of the penalty box after Washington lifted its asset cap to allow WFC to do more lending. Also, the bank stocks have become leaders

Sales and earnings beat, some of that was from lower provisions for credit losses. WF cut their full-year forecast. Shares were punished by 5% yesterday. He's sticking by this, though. Trusts the CEO to get things back on track.