Wells Fargo (WFC)

The CEO has steered a great turnaround their last report was great. He just added more shares. Banks are slumping, but they're slumping as a group. Don't give up on them.

The stock fell given misleading clients, but that's in the past. A different company now. A cheap stock and expects good earnings to come. A large money center bank now, but lacks the scale to compete with peers like JPM or BAC, both of which he prefers.

Bank earnings start on Friday, and he expects a good report, but the market will yawn.

Banks reported their Q2 today, but the reaction to Wells is so-so, muted. Office real estate is weak and the CEO talking about the regulatory environment tightening--you must be concerned about these.

She bought more today upon WF's positive quarter. WF reiterated their net interest income, but that doesn't look as positive as JPM's comments today, so it's silly the market is reacting this way. 17% total revenue growth and 45% net interest income up 45% YOY. All capital levels are good and reinstated share buybacks. EPS and revenue beats. None-interest income is -13% YOY. Trades at 0.9x book, better than JPM's.

He expects a strong report. They had a nice upgrade today. Good loan loss reserves and they have a safe bond portfolio.

Financial sector seeing pressure since Silicon Valley Bank collapse.
Trading at discount to book value.
Will continue to own shares and has been buying more.
~3.2% dividend yield with a 7-8x P/E ration.
Very diversified business operations with many revenue streams.

He prefers the large central banks. He feels that depositors will pull money out of regional banks and place it in the large mega banks even at lower rates.. This could lead to more centralization of the banks in the U.S.

Still working out regulatory issues on selling practices.
Constrained on how fast can grow balance sheet.
Would prefer shares in JP Morgan.
Would look elsewhere in the sector.