5 Finance Stocks to Buy According to Billionaire Ray Dalio

3. Wells Fargo & Company (NYSE:WFC)

Bridgewater Associates’ Stake Value: $77,842,000

Percentage of Bridgewater Associates’ 13F Portfolio: 0.42%

Number of Hedge Fund Holders: 88

Wells Fargo & Company (NYSE:WFC), a California-based multinational financial services organization operating primarily via Wells Fargo Bank, is one of the top finance stocks to purchase according to billionaire Ray Dalio, who added 19% to his existing stake in the company during the third quarter of 2021. Bridgewater Associates has a $77.8 million position in Wells Fargo & Company (NYSE:WFC), which accounts for 0.42% of the firm’s total Q3 portfolio.

One of the main stakeholders of Wells Fargo & Company (NYSE:WFC) as of September is Theleme Partners, with 20.1 million shares worth $934.1 million. According to Insider Monkey’s Q3 data, a total of 88 funds were bullish on Wells Fargo & Company (NYSE:WFC), down from 94 funds in the preceding quarter. 

On October 14, Wells Fargo & Company (NYSE:WFC) posted its Q3 results, announcing earnings per share of $1.22, exceeding estimates by $0.28. The $18.83 billion revenue dipped 0.15% year-over-year, but outperformed estimates by $542.17 million. 

UBS analyst Erika Najarian on December 9 assumed coverage of Wells Fargo & Company (NYSE:WFC) with a Buy rating and a $65 price target, calling Wells Fargo & Company (NYSE:WFC) one of her “highest conviction Buy ideas.”

Here is what Davis Global Fund has to say about Wells Fargo & Company (NYSE:WFC) in its Q3 2021 investor letter:

“…This second chart highlights that financials remain the cheapest part of the market today and continue to be extremely attractive. Strong capital ratios, conservative lending practices, already record low interest rates and now a strengthening economy, all paired with low valuations, bode well for future returns.

Take our top financials holding in Wells Fargo, for instance. Wells Fargo is trading at 1.3x tangible book value, while we expect return on equity (ROE) to be in the mid-to-high teens over time. Even in this low-rate environment, the current multiple is only 12x 2021 owner earnings, and our IRR estimate is 12–13%. Wells Fargo has performed well this year, up 51% year-to-date, yet still looks very attractive, which speaks to how undervalued it was and why it is so important to be patient when investing in high-quality companies trading at low valuations. Rather than invest on the basis of unpredictable near-term catalysts, we prefer to be patient as earnings and cash build up, even if the stock price does not immediately reflect the economic reality. We continue to like our positions in financials.”