Wells Fargo (WFC)

This has gone through some difficult times of late. Their CEO left and they got a new one. The whole premise was that they were a store as opposed to a bank, which created a very sales oriented culture. They are now past that, and it is a great bank. This is a cheap stock. The steepening of the yield curve really helps them. If you can buy this at a good price, you should do well over the long-term.

(Top Pick Dec 10/15, Down 0.67%) He would stick with it for now. He believes these banks are positioned to be some of the leading stocks.

BAC-N vs. WFC-N. There will be a bit of a push back on regulations by the industry. The big banks will only benefit from all that. Both banks will rebound. Warren Buffet is not a seller of his WFC-N. Short term BAC-N would be his favourite and WFC-N would be his favourite next year if there is no other negative news item.

Wells Fargo (WFC-N) or Citigroup (C-N)? He prefers Citigroup easily. This company’s problems have been dealt with, but they are not going to go away in a hurry. The brand and the consumer sentiment has been hurt, and is going to hurt them a lot longer than most people are recognizing.

A money centred bank, but also a very large brokerage firm in the US, the only large brokerage firm that covers the RIA channel, the independent channel and the employees (?) division, and as such, there may be an opportunity. That is the way to go when it comes to US brokerages. This is so large and does so many different things, that for him it has just too many moving parts. He would be pretty reluctant to buy the shares.

This is going to be a tug-of-war in the popular opinion of investors right now. From a sentiment perspective, it is not a name he is interested in until the dust clears a little. The growth strategy is a little suspect, as he understands they are not allowed to leave the US based on repercussions from 2008-2009. He would rather go into the regional banks where they don’t have some of the larger, macro economic government political headwinds. Consider using the Hamilton Capital Global Bank (HBG-T) ETF, which has about 25-30 mid-regional banks.

(Market Call Minute.) This has really been kicked because they have been found to basically having manufactured customers, which showed that they had very poor internal controls.

(Market Call Minute.) He prefers J.P. Morgan (JPM-N).

If you were going into any of the US banks, this is probably the place to be. Their recent problems raises the question if this were a broad-based culture in the bank, or one specific area that got out of hand. He has had his best luck buying Canadian bank stocks after they have had a disaster of one sort or another.

From an investment standpoint, it is probably time to add to your holdings. Typically, when he sees a big scandal hit a stock and the price comes off, that is usually a buying opportunity.

He is disappointed by the news of fake accounts. C-N is trading at about 65% of net assets. WFC-N should have been a good cross seller. He has been disappointed. He is gathering information to make an informed decision. He prefers C-N (a Top Pick).

(A Top Pick Aug 13/15. Down 19.36%.) He really likes the US banks, but exited this one around January at $62-$63 a share. His big weights now would be J.P. Morgan (JPM-N) and Bank of America (BAC-N). He would not invest in this right now. (See Top Picks.)

There are other companies you want to invest in, such as Citigroup (C-N). Also, J.P. Morgan (JPM-N) has the earnings behind them, and would make a lot of sense. It has a nice strong dividend yield. Wells Fargo was accused and is paying a fine for having created phony accounts for customers so that they could charge an additional fee.

Everybody classified this as “Best in class” until the scandal came up. Thinks it is still a very good bank. The loan book is still very solid. He wouldn’t buy it yet, but would wait until next spring or summer.

She bought it on the back of the recovery a few years ago. She thinks the false accounts issue is manageable. She still likes the name and thinks the valuation is still attractive. She is not sure about their expansion in Canada involving only commercial banking. They are pretty well a US bank.