9th out of 17 is relatively high for a cash holding, and so I recently wrote towards the end of July about considering Wells Fargo as one of the few remaining high quality, value purchases out there. I still believe this to be the case and consequently acted.
Over the last week or so I had watched the stock move sideways in a tight 48.5 range (shown below) for about five trading days or so, and I knew that I had to pull the trigger if I was going to do it.
I thought the stock was definitely going to move one way or the other (to be honest I wasn't certain it'd be up!), and I missed my opportunity to get it in the high 47s earlier in August, (though I did mention in my article that it might drop into the 47s). Anyway, in the end, I purchased it right before its most recent jump into the 50s. Here are the details of my trade:
# of Shares Purchased: 87
Purchase Price: $48.60
Yesterday's close price: $50.80
Thankfully I got in before this recent pop in share price as shown below, though I don't think it will stay as high as it is now nor do I intend to sell anytime soon, so it is basically a mute point. Nonetheless, I still think WFC is valued in the Low 60s, high 50s, giving me sufficient cushion at the stated entry price. Add to that a 3% yield, and increasing rate probabilities and you've got a pretty good total return I think.
What do you think? Often I stay away from financials. I know many have recommended Canadian banks, which I have not acted upon yet but am definitely interested.
Thanks for reading!
Passive Income Dude
Congratulations on WFC.
ReplyDeleteHaving cash as you 9th largest holding is a diligent move IMO.
Keep that cash ready!!
Thanks Divi Cents! I know from your recent update that you're sitting on a ton of cash! :) That must be a great feeling and definitely let me know when you deploy that baby!
DeleteThose Canadian banks sure have me tempted but I have not pulled the trigger yet
ReplyDelete:) convictions and actions! I hear you bro!
DeleteLike the buy. I just nibbled on some WFC myself. It's been a while since I added to that name and quite frankly it's been tough deciding where to put my fresh cash. Still a decent value and attractive yield at current prices.
ReplyDeleteKeith, That's good to hear that you too think WFC is a buy. I greatly respect your investment decisions, so hearing that puts me more at ease. I think I will wait 4-5 months for the next purchase as we're seeing less and less trading volume in the market.
DeleteBeen adding to this position slowly! I like the buy!
ReplyDelete-TDM
Thanks TDM! Good to hear. I was reviewing their Financial Statements today and there are some concerns (still learning how to do this properly), but overall it seems great. Wish I would have bought it back in 2009. :)
DeleteI bought shares of WFC recently, so happy to be a fellow shareholder! Congrats with the buy and thanks for sharing!
ReplyDeleteThanks FerdiS. It's great to see that a lot of us are seeing value in the same places.
DeleteGreat buy. WFC is the only US bank that I own. You timed the purchase well.
ReplyDeleteThanks IH! I have to be honest on this and really did think some move was going to happen, but that I really got lucky with it going up versus down. I'm more in it for the near term anyway (3+yrs) than the specific entry price. Glad to see it moved up though!
DeleteGreat buy WFC seems to be very popular with investors :)
ReplyDeleteThanks Freezeman, It should work out alright for the near term. I am concerned a little bit about some items on its Cash Flow Statement, but I'm still learning the specifics on some of this. Will let you know if I change my thesis!
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