Watch Wells Fargo Rise From the Ashes Today
Wells Fargo found itself with a bit of upside earlier this week, perhaps as some of the glowing comments made by Warren Buffett at the Berkshire Hathaway annual meeting regarding the big bank sunk in around Tuesday and Wednesday. Giving the entire banking sector a thumbs up, the Oracle of Omaha also noted that, "I feel very good about our investment in Wells Fargo."Â
It's difficult to get a better boost than that, and the entire sector got another lift when Bank of America and monoline insurer MBIA penned a long-awaited settlement, a legal muddle that had been ensnaring both for some time. Even JPMorgan Chase CEO Jamie Dimon's problems with regulators and shareholders didn't put much of a ding in that bank's share price -- though Dimon may have Buffett to thank for that, as well.
But then, the axe fell. Things got a little hairy as the New York Attorney General announced that both Bank of America and Wells are in mortgage-related trouble again, which doubtless weighed down both banks' shares yesterday.
This isn't good news for either bank, though B of A will probably feel the ire of investors more than Wells, simply because of the vast array of lawsuits constantly cropping up regarding Countrywide's stable of smoldering loans.
Truly, Wells' stock price drop was more likely attributable to the fact that the stock went ex-dividend on Wednesday, a temporary situation. And after that nice $0.30 payout, most investors are probably not complaining.
All that being said, it really doesn't matter much how Wells Fargo's stock behaves today -- or on any given day, for that matter. As Foolish investors well know, a snapshot look at any given stock, taken in isolation, can be detrimental to the long-term view. The big picture, as always, is what really matters, and the normal ups and downs of the market are something that investors with their eyes on the prize take into consideration, knowing that these hills and valleys are just part of the business of intelligent, long-term investing.
Wells Fargo's dedication to solid, conservative banking helped it vastly outperform its peers during the financial meltdown. Today, Wells is the same great bank as ever, but with its stock trading at a premium to the rest of the industry, is there still room to buy, or is it time to cash in your gains? To help figure out whether Wells Fargo is a buy today, I invite you to download our premium research report from one of The Motley Fool's top banking analysts. Click here now for instant access to this in-depth take on Wells Fargo.
Editor's note: A previous version of this article stated that Wells Fargo was up 20%. The Fool regrets the error.
The article Watch Wells Fargo Rise From the Ashes Today originally appeared on Fool.com.
Fool contributor Amanda Alix has no position in any stocks mentioned. The Motley Fool recommends Berkshire Hathaway and Wells Fargo. The Motley Fool owns shares of Bank of America, Berkshire Hathaway, JPMorgan Chase, and Wells Fargo. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.
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