Starter Stock Portfolio: 5 Large-Cap Stocks To Buy

2. Wells Fargo & Company (NYSE:WFC)

Number of Hedge Fund Holders: 83

Wells Fargo & Company (NYSE:WFC), an American multinational financial services company, features as one of the best large-cap stocks to consider for a starter stock portfolio. Wells Fargo & Company (NYSE:WFC)’s Q3 earnings topped Wall Street expectations as the company benefited from rising interest rates and prioritized expense management. 

On October 17, Piper Sandler analyst R. Scott Siefers raised the price target on Wells Fargo & Company (NYSE:WFC) to $49 from $48 and maintained an Overweight rating on the shares following the Q3 results. The analyst saw “some encouraging but admittedly mixed trends” in the Q3 report.

According to Insider Monkey’s second quarter database, 83 hedge funds were long Wells Fargo & Company (NYSE:WFC), compared to 93 funds in the earlier quarter. Boykin Curry’s Eagle Capital Management is the biggest stakeholder of the company, with more than 18 million shares worth $709.3 million. 

Here is what Oakmark Funds specifically said about Wells Fargo & Company (NYSE:WFC) in its Q3 2022 investor letter:

“Wells Fargo & Company (NYSE:WFC) has been a long-time holding in the Oakmark Fund. Despite the positives of higher interest rates and the company making good progress on reducing expenses and regulatory consent orders, Wells Fargo shares have fallen one-third from their highs earlier this year to roughly 6.5x our estimate of normalized earnings power, and the stock ended the quarter at ~1x next year’s tangible book value. We find this is far too cheap for a strong banking franchise capable of tangible returns in the low-to-mid teens across business cycles.”