Add WFC to Your Bargain Buy List

by Serge Berger | April 23, 2012 6:43 am

Wells Fargo & Co. (NYSE:WFC[1]) — As discussed on Friday[2], the financials not only put in the best performance as a sector of the S&P 500 in the first quarter of 2012, but they remain looking good on the charts. Clearly, if the broader market has more to correct in the medium term before finding better footing (my base-case scenario), the financials will also see some pressure on their share prices. Nevertheless, I find well diversified financial services companies such as Wells Fargo to be very attractive on price pullbacks.

The company, along with most other large U.S. banks, already reported their first-quarter earnings, so currently the risk of any earnings surprise move is off the table.

WFC’s chart still looks juicy as the stock has so far held the uptrend dating back to mid-November 2011. The 50-day simple moving average currently provides some support, and if broader stock indices have already seen their “correction” low then the bear flag on the chart should work with a price target near $37.

Alternatively, and in my opinion somewhat more likely, the stock finds better support between $29 and $31.50 before climbing higher again.

As a side note, WFC currently sports an indicated gross dividend yield of 2.67%, which albeit nothing huge, still beats 10-year U.S. Treasury yields.

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Source URL: https://investorplace.com/2012/04/trade-of-the-day-wells-fargo-co-nyse-wfc/

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