Sunday, January 24, 2016

Seeking Alpha: Wells Fargo Well-Positioned And Willing To Deploy Capital

While JPMorgan (NYSE:JPM) shrinks its balance sheet and expands its lending, BB&T (NYSE:BBT) works to integrate its M&A binge, PNC Financial (NYSE:PNC) works on improving its branch network, and Citi (NYSE:C) continues to run off past bad debts, Wells Fargo (NYSE:WFC) is keeping busy too. Not only has the company adjusting its rate sensitivity down a bit, the company has struck three deals with General Electric (NYSE:GE) to acquire commercial real estate loans, a railcar leasing business, and a sizable commercial lending and leasing operation that includes distribution and vendor financing and asset-based middle market lending.

Wells Fargo looks pretty attractive to me right now. Not only is the business simple enough to avoid the steeper G-SIB surcharges that will apply to JPMorgan and Citi, but there's a very attractive mix of commercial and consumer lending, a leading mortgage and auto lending business, growing card loans, and fee-generating businesses like the expanded leasing operation. I suppose I could ask for better reserves and faster NPA resolution, but those aren't huge negatives to me. This next year may not be the best in terms of reported results, but I believe Wells Fargo is well-placed for growth over the next three to five years and attractively priced below $60.

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Wells Fargo Well-Positioned And Willing To Deploy Capital

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