Wells Fargo is updated and rated (higher) Buy at $54.82. Despite being the world’s most valuable bank Wells Fargo’s operations are mostly concerned with the traditional lending out of depositor money. It does not engage in the large-scale investment banking or creation of structured products that the Wall Street banks engage in. It has relatively little pretense outside of the United States. These features lower its risks.
We first added it to this site at the very height of the financial crisis (just prior to the bottom in stock prices) and rated it a highly Speculative Buy at that time. It is up 402% since then. It’s price was fairly volatile for several years after the bottom but has risen steadily since the summer of 2011 although with some volatility in 2015. We had rated it a Speculative (lower) Strong Buy in February 2010 and it is up 104% since then.
Wells Fargo is an excellent company with excellent management. It appears set to continued to grow and provide good returns to its owners over the years. For Canadian investors there is currency risk. Currency risk is something that should be considered in an asset allocation context and is not part of the individual securities selection process. That is, our rating here (and for all U.S. companies on our list) does not consider currency risk but is based on investing U.S. dollars with the return to be accounted for in U.S. dollars. I recently reduced my own position in this company in order to free up U.S. dollars to convert to Canadian dollars. I retain a large position in Wells Fargo.