Rarely do you get the chance to buy one of Berkshire Hathaway CEO Warren Buffett’s favorite stocks on sale. But that’s the case now with Wells Fargo.
Sure, the bank looks pretty bad following revelations of fraud that cost it $185 million in fines last September. In this scandal, Wells Fargo & Co. WFC, +2.59% staff opened up over two million phony deposit and credit card accounts to hit aggressive sales targets so they could earn bonuses.
But as bad as the scandal was for customers, investors should be thankful because it creates a discount for the bank’s stock, which is down about 10% since the beginning of March.
Wells Fargo currently goes for a forward price-to-earnings (P/E) ratio of 12. Its median over the past 20 years has been 13. The industry average right now is 13.6, according to Thomson Reuters.
Source: Bloomberg
Trader I. Ivanov
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