New Reasons To Be Bullish On Wells Fargo
Maxwell is a member of The Motley Fool Blog Network -- entries represent the personal opinion of the blogger and are not formally edited.
Though these things really can change in a day’s time, one thing for sure is that Wells Fargo (NYSE: WFC) is offering mortgage rates that are “among the lowest ever seen in recorded history and represent astonishing value for the borrower”. So if you’re looking to get a mortgage, now would be the ideal time to do so.
An analysis of the situation will reveal to you that the rates are low for all aspects of mortgage lending. But what does this mean for the company itself? Surely such low rates will not benefit it in the long run. In this case, it is the people who are looking for mortgages at affordable prices that may benefit more than Wells Fargo stockholders. On the other hand, an increased interest from the general public in using Wells Fargo as a source for mortgage loans may mean good things for the company in the long run as it will expand the ‘customer base’ as it were. Again, these things are never a guarantee to continue, but Wells Fargo looks positioned to do well in the mortgage lending arena.
In other news, Wells Fargo has shown a little initiative with its new facility that allows Mac users to make remote deposits. The company has cornered the Mac users in its market, and perhaps in the future will move to other platforms in computing. The step is certainly in the right direction, though.
Mac users will now be able to make remote deposits to Wells Fargo using Panini Scanners. According to one source the “service is available to all Wells Fargo Commercial Electronic Office (CEO) Desktop Deposit users who connect Panini scanners with iMac, MacBook Pro, MacBook Air, Mac mini, and Mac Pro computers”. The company says that this development shows that it cares about its customers and their businesses as well as the technologies that their customers use. The company went on to indicate its belief that Apple (NASDAQ: AAPL) is a growing franchise that more and more businesses are using.
The main advantage of the new facility is that it will allow businesses that frequently receive payments by check to deposit the money immediately. This makes the process safer as well as easier for everyone involved in it. The innovation negates the need to take time and actually go into a physical bank branch to make the deposit. Deposits can be made from anywhere at any time. Unfortunately, it does require that you own a Mac, and, not everyone may be keen on that idea, at least not until Apple grows even further. It is a very innovative idea, but the company needs to be careful about cutting out an important sector of the consumer market, namely those without Macs.
In general, Wells Fargo appears to be doing better than the vast majority of its competitors, which we will discuss shortly. If you are looking for a bank stock to back this is probably one of your best options at this stage, although it really depends on a number of different factors that you will need to take into account.
Good news and bad news for Wells Fargo competitor Citigroup (NYSE: C): the company recently increased its capital significantly by selling 10.1% of its equity interest in Akbank. This sale generated $1.15 billion. However on the other side of the coin, the company recently suffered a loss of about $20 million due to the fact that Facebook (NASDAQ: FB) made a hashed job of debuting on the NASDAQ. This is definitely a stock to keep an eye on to see what further developments ensue, especially those having to do with Facebook.
Wells Fargo and Citigroup were both involved in a recent settlement involving foreclosures. The settlement was far from neat and tidy. Other banks that were involved include JPMorgan Chase (NYSE: JPM) and Bank of America (NYSE: BAC). It is interesting to note, however, that Wells Fargo is in a far better position following this messy court case than Bank of America. In fact, for anyone looking into bank stocks, Bank of America is far from being a sensible option in the current climate considering how unhealthy it currently is.
JPMorgan recently joined the trend to expand operations in China. This is because the country is growing in every way imaginable and, even though a number of people say that growth has slowed in this country, it is still happening at a faster rate than in many other places. A foothold in this emerging market may be what the company needs to get back on its feet and, to me, may be the factor that neutralizes the sting of the losses it has experienced. Stockholders would do well to monitor the results of this situation when determining their position on the stock.
Things are looking a little bleak for the financial stocks, but there is hope out there. U.S. Bancorp is a stock that seems to be running smoothly right now. Recently, it was lauded as one of the most valuable companies that are currently in business. In addition, it is gaining further investor support through its innovative new app which allows Android users to apply for and use a cobranded credit card while shopping. Essentially they can apply for it and then, if they are approved, they will be able to use it to make purchases almost immediately in store. It only holds true for select retail outlets, however.
Wells Fargo is certainly fairing better than the names it is often associated with. If it can keep it success up, it should continue to fare well while its competitors sink and get buried in litigation and other annoyances. The innovation is certainly nice, but shareholders would just like their bank to keep out of trouble. So far so good for Wells Fargo this year and the pay-off should come soon.
StockCroc1 has no positions in the stocks mentioned above. The Motley Fool owns shares of Bank of America, Citigroup Inc , Facebook, JPMorgan Chase & Co., and Wells Fargo & Company and has the following options: short APR 2012 $21.00 puts on Wells Fargo & Company, short APR 2012 $29.00 calls on Wells Fargo & Company, short OCT 2012 $33.00 puts on Wells Fargo & Company, and short OCT 2012 $36.00 calls on Wells Fargo & Company. Motley Fool newsletter services recommend Wells Fargo & Company. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.If you have questions about this post or the Fool’s blog network, click here for information.
