Two Ways To Play: Wells Fargo Hitches Wachovia To Its Wagon
Strengthen your portfolio in good times and bad.
Shares of Wells Fargo (WFC) rose early in the session after the company sealed the deal to acquire Wachovia (WB) for $11.7 billion. Both companies said they will stick to the terms of the deal struck on October 3rd. This leaves out Citigroup (C), which made its own offer 4 days earlier.
The deal is Wells Fargo Chairman Richard Kovacevich's biggest since he led Norwest Corporation's takeover of Wells Fargo roughly 10 years go. Like JPMorgan's (JPM) purchase of Washington Mutual, he's using the worst financial crisis since the Great Depression to extend firm's reach.
Deutsche Bank analyst Mike Mayo said it's the best deal of the bunch. In a note to clients, he wrote, "The main issue -- and it's a big issue -- is how much weaker US housing, mortgage and consumer markets will take a toll."
WFC closed the day up 5% to $28.66 after a very volatile trading session.
From the Bull Pen: Stocks like Wells Fargo, Bank of America and JPMorgan will survive this mess and benefit in the long run. Bulls can look to these plays when the tape finally turns.
From the Bear Cave: At risk may be the smaller regional banks, but with the tape so oversold, bears may be wise to sit this one out.
Actionable ideas, instant analysis. Real-time from bell to bell.
Minyanville's Buzz & Banter - 14 day FREE trial
The information on this website solely reflects the analysis of or opinion about the performance of securities and financial markets by the writers whose articles appear on the site. The views expressed by the writers are not necessarily the views of Minyanville Media, Inc. or members of its management. Nothing contained on the website is intended to constitute a recommendation or advice addressed to an individual investor or category of investors to purchase, sell or hold any security, or to take any action with respect to the prospective movement of the securities markets or to solicit the purchase or sale of any security. Any investment decisions must be made by the reader either individually or in consultation with his or her investment professional. Minyanville writers and staff may trade or hold positions in securities that are discussed in articles appearing on the website. Writers of articles are required to disclose whether they have a position in any stock or fund discussed in an article, but are not permitted to disclose the size or direction of the position. Nothing on this website is intended to solicit business of any kind for a writer's business or fund. Minyanville management and staff as well as contributing writers will not respond to emails or other communications requesting investment advice.
Copyright 2011 Minyanville Media, Inc. All Rights Reserved.
Daily Recap Newsletter