May 25, 2015 Wells Fargo Preferred Shares

The report on the Wells Fargo preferred shares is updated and rated Weak Buy / Hold at $24.49

I had first mentioned these shares on December 19, 2013 when I had bought them at $19.90. At that time they looked like a bargain because they had fallen from the May 2012 issue price of $25.00. I could not see any reason for the fall and since Wells Fargo was a strong company I figured they might recover. They made a quick recovery to the $22 range by April 2014 and I sold. They have now recovered to $24.49 and so these have been a good preferred share investment.

At this time yielding 5.2% they may still be a reasonable investment for those looking for U.S. dollar fixed income but they will fall in price if long-term interest rates rise. Those who expect long-term interest rates to rise more than a modest amount should sell if they hold these.