Wells Fargo (WFC) Stock Gained on Plans to Grow Through Acquisitions

NEW YORK (TheStreet) -- Wells Fargo (WFC) shares closed trading up 0.9% to $57.21 on Wednesday after the bank said that it plans to grow through acquisitions.

CEO Timothy Sloan said at a financial conference today that the bank would continue to purchase pieces of General Electric's (GE) loan portfolios as well as assets from other company's that fit the bank's business model.

"If they fit our business model and we're comfortable from a customer standpoint, we'd love to grow that way. But we don't have to do that," Sloan said, according to the Wall Street Journal.

Wells Fargo is a key holding of Jim Cramer's Action Alerts PLUS charitable trust and Cramer sees the stock as the top performer in the financial sector calling it the "best financial in the world."

TheStreet has more coverage on Wells Fargo here.

TheStreet Ratings team rates WELLS FARGO & CO as a Buy with a ratings score of A. TheStreet Ratings Team has this to say about their recommendation:

"We rate WELLS FARGO & CO (WFC) a BUY. This is based on the convergence of positive investment measures, which should help this stock outperform the majority of stocks that we rate. The company's strengths can be seen in multiple areas, such as its revenue growth, solid stock price performance and expanding profit margins. We feel its strengths outweigh the fact that the company has had sub par growth in net income."

Highlights from the analysis by TheStreet Ratings Team goes as follows:

  • WFC's revenue growth has slightly outpaced the industry average of 0.1%. Since the same quarter one year prior, revenues slightly increased by 2.9%. This growth in revenue does not appear to have trickled down to the company's bottom line, displayed by a decline in earnings per share.
  • WELLS FARGO & CO reported flat earnings per share in the most recent quarter. This company has reported somewhat volatile earnings recently. But, we feel it is poised for EPS growth in the coming year. During the past fiscal year, WELLS FARGO & CO increased its bottom line by earning $4.10 versus $3.89 in the prior year. This year, the market expects an improvement in earnings ($4.15 versus $4.10).
  • Compared to where it was a year ago today, the stock is now trading at a higher level, regardless of the company's weak earnings results. Turning our attention to the future direction of the stock, it goes without saying that even the best stocks can fall in an overall down market. However, in any other environment, this stock still has good upside potential despite the fact that it has already risen in the past year.
  • The gross profit margin for WELLS FARGO & CO is currently very high, coming in at 92.88%. Regardless of WFC's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, the net profit margin of 26.07% trails the industry average.
  • Net operating cash flow has decreased to $2,515.00 million or 11.47% when compared to the same quarter last year. Despite a decrease in cash flow WELLS FARGO & CO is still fairing well by exceeding its industry average cash flow growth rate of -37.15%.
  • You can view the full analysis from the report here: WFC Ratings Report

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