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6 Buys Breaking Near 52-Week Highs

WFC Chart WFC data by YCharts

Wells Fargo (WFC - Get Report)

Background: Wells Fargo trades an average of 21 million shares per day with a marketcap of $190.8 billion.

52-Week High: $35.63

Wells Fargo and US Bancorp (USB) are my two favorite banks. Don't get me wrong, I like the others as trading vehicles, but these are two solid banks to invest in for the long haul.

I am not alone in my view, 21 out of 25 analysts rate Wells Fargo a buy or strong buy. The average analyst target price for WFC is $38.64.

Wells Fargo has traded sideways for the last few months and the new leg higher is accompanied with large amounts of volume. Analysts are probably going to be proved correct, but before Wells Fargo rises to $38.64, I expect one or more small speed bumps along the way.

Look for $35-ish to enter a long. Wells Fargo pays shareholders a lot more than depositors. The current yield is 2.44%, and because all the banks are more or less treated the same, the mean fiscal year estimate price-to-earnings ratio is 10.9. Very cheap for a big name company.

Short sellers are next to impossible to find. Short interest is so low I only include it to demonstrate the smart money is not betting against this company. 0.8% of the float is short based on the last reported numbers.

At the time of publication, the author held no positions in any of the stocks mentioned.

This article is commentary by an independent contributor, separate from TheStreet's regular news coverage.
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