Top 5 Stocks to Buy According to Patrick Degorce’s Theleme Partners

2. Wells Fargo & Company (NYSE:WFC)

Degorce’s Stake Value: $911,590,000
Percentage of Patrick Degorce’s 13F Portfolio: 26.61%
Number of Hedge Fund Holders: 94

13F filings reveal that Theleme Partners owned 20.13 million shares in the company at the end of the second quarter of 2021, worth $911.59 million, representing 26.61% of the portfolio.

On September 28, Morgan Stanley analyst Betsy Graseck downgraded Wells Fargo & Company (NYSE:WFC) to “Equal Weight” from “Overweight” and reduced her price target to $46 from $49.

Out of the hedge funds being tracked by Insider Monkey, New York-based investment firm Eagle Capital Management is a leading shareholder in Wells Fargo & Company (NYSE:WFC) with 34.91 million shares worth more than $1.58 billion.

L1 Capital mentioned Wells Fargo & Company (NYSE:WFC) in its second-quarter 2021 investor letter. Here is what the firm has to say:

“Wells Fargo (Long +16%) was the strongest contributor to portfolio performance over the quarter. Wells Fargo shares rallied given a better outlook for bad debts driven by improving employment and house price trends. The company had been very undervalued due to excessive fears around likely bad debts due to the pandemic, the continued regulatory “asset cap” (a punishment that was put in place in 2017 for numerous compliance failures) and an inability to commence buybacks. The share price has subsequently recovered strongly in recent months as the company has progressed its turnaround program under the leadership of the well-regarded CEO, Charles Scharf (former CEO of Visa and BNY Mellon). Wells Fargo is now closer to getting the asset cap lifted and has announced a huge cost out program (US$8b+) as well as an $18b buyback program to be completed over the next 12 months. Wells Fargo shares have rallied more than 50% since we initiated the position in late 2020. Given the strong rally, we elected to exit our position and rotate into stocks with larger valuation upside.”