We recently published a list of Jim Cramer’s Latest Calls: Top 10 Stocks. Since Wells Fargo & Co (NYSE:WFC) ranks 4th on the list, it deserves a deeper look.
Jim Cramer in a latest program said that if companies would “own up” to the changing circumstances, things would be “so much easier” for them as well as investors.
“There is so much information and misinformation flying around at this point in the earnings season that it’s very easy to be led astray,” Cramer said.
Cramer thinks companies are “leaving out” important information which can cause investors to make “faulty decisions.”
As an example, Cramer talked about how food and beverage companies are not talking about the impact of weight loss drugs on their financials
Cramer said that GLP-1 drugs are extremely “powerful” and they cause a decline in cravings for snacks and liquor. This, according to Cramer, directly affects beverage and snack companies. However, Cramer said these companies are intentionally not mentioning the impact of these drugs.
“I wonder how long they can maintain this fiction, it’ll be better if they just own that it’s a problem rather than just ignoring it.”
Cramer was also furious that consumer companies are not admitting that high prices are impacting their financials. He said hotels and entertainment companies raised prices in the past but now they are not willing to bring them down despite facing pricing headwinds.
Cramer also called the claims that huge AI investments are not bringing any solid results for companies “absurd.”
We watched several latest programs of Jim Cramer on CNBC and picked 10 important stocks he’s talking about. With each stock we have mentioned the number of hedge fund investors. Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 275% since May 2014, beating its benchmark by 150 percentage points (see more details here).
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Wells Fargo & Co (NYSE:WFC)
Number of Hedge Fund Investors: 73
Cramer was recently asked about fintech company Enova International. He instead recommended Wells Fargo as a better buy.
“It’s untraditional lending. I am just as traditional as I say go with the stock that collapsed over the last week, go with Wells Fargo,” Cramer said.
Wells Fargo & Co (NYSE:WFC) recently said it expects to increase its third quarter 2024 common stock dividend by 14 percent to $0.40 per share.
Like Cramer, many other analysts are praising the management’s plans to make Wells Fargo & Co (NYSE:WFC) efficient. During the first quarter the company saw a 10% increase in investment banking revenue, while trading revenue jumped 15% increase YoY, amounting to $1.8 billion. The bank has notably expanded its credit card portfolio, with card balances increasing by 30% from FY19 to FY23. This growth is fueled by new product offerings and a focus on high-quality customers, with over 80% of credit cardholders having FICO scores above 660.
In 2024 Wells Fargo & Co (NYSE:WFC) is expected to generate about $23 billion of pre-tax income, and $25 billion in 2025. Analysts believe the Federal Reserve could lift restrictions (imposed following compliance issues in 2016) from the bank, including the asset cap, this year, unlocking further growth catalysts.
ClearBridge Value Equity Strategy stated the following regarding Wells Fargo & Company (NYSE:WFC) in its fourth quarter 2023 investor letter:
“Stock selection in the financials sector proved to be the largest contributor to relative outperformance. Banking stocks such as Wells Fargo & Company (NYSE:WFC) saw their share price rise during the quarter as investors anticipated Fed rate cuts that would reduce deposit costs while retaining economic strength and minimizing the risk of credit losses.”
Overall, Wells Fargo & Co (NYSE:WFC) ranks 4th on Insider Monkey’s list titled Jim Cramer’s Latest Calls: Top 10 Stocks. While we acknowledge the potential of Wells Fargo & Co (NYSE:WFC), our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns, and doing so within a shorter timeframe. If you are looking for an AI stock that is more promising than WFC but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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Disclosure: None. This article is originally published at Insider Monkey.
