Editor's Note: TheStreet ratings do not represent the views of TheStreet's staff or its contributors. Ratings are established by computer based on metrics for performance (which includes growth, stock performance, efficiency and valuation) and risk (volatility and solvency). Companies with poor cash flow or high debt levels tend to earn lower ratings in our model.
NEW YORK (
-- Wells Fargo
) has been reiterated by TheStreet Ratings as a buy with a ratings score of B . The company's strengths can be seen in multiple areas, such as its solid stock price performance, impressive record of earnings per share growth, compelling growth in net income, revenue growth and good cash flow from operations. Although no company is perfect, currently we do not see any significant weaknesses which are likely to detract from the generally positive outlook.
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Highlights from the ratings report include:
- Investors have apparently begun to recognize positive factors similar to those we have mentioned in this report, including earnings growth. This has helped drive up the company's shares by a sharp 34.78% over the past year, a rise that has exceeded that of the S&P 500 Index. Regarding the stock's future course, although almost any stock can fall in a broad market decline, WFC should continue to move higher despite the fact that it has already enjoyed a very nice gain in the past year.
- WELLS FARGO & CO has improved earnings per share by 22.2% in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past two years. We feel that this trend should continue. During the past fiscal year, WELLS FARGO & CO increased its bottom line by earning $2.82 versus $2.21 in the prior year. This year, the market expects an improvement in earnings ($3.35 versus $2.82).
- The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Commercial Banks industry. The net income increased by 21.8% when compared to the same quarter one year prior, going from $4,055.00 million to $4,937.00 million.
- Despite its growing revenue, the company underperformed as compared with the industry average of 14.8%. Since the same quarter one year prior, revenues slightly increased by 5.7%. Growth in the company's revenue appears to have helped boost the earnings per share.
- Net operating cash flow has significantly increased by 60.46% to $14,808.00 million when compared to the same quarter last year. In addition, WELLS FARGO & CO has also vastly surpassed the industry average cash flow growth rate of -8.15%.
Wells Fargo & Company provides retail, commercial, and corporate banking services. The company operates in three segments: Community Banking; Wholesale Banking; and Wealth, Brokerage, and Retirement. Wells Fargo has a market cap of $171.77 billion and is part of the financial sector and banking industry. The company has a P/E ratio of 10.3, below the S&P 500 P/E ratio of 17.7. Shares are up 18.4% year to date as of the close of trading on Wednesday.
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--Written by a member of TheStreet Ratings Staff.
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