Two Ways To Play: Wells Fargo Raises the Bar-Go
Strengthen your portfolio in good times and bad.
WFC finished today's session up a whopping 32% to close at $27.23, the biggest jump since July 1980. The lender today reported results for its second quarter, saying net income fell to $1.75 billion, or 53 cents a share. That number was above analyst expectations of 50 cents per share. WFC also said revenues increased by 16% to a record $11.5 billion versus analysts' estimates of $10.65 billion.
The company said gains in credit-card fees and insurance helped offset bad home loans. Further, WFC also said it was raising its dividend by 10%, which helped signal confidence to the markets and that the bank had adequate capital in a time where financial companies have posted more than $421 billion in writedowns and credit-related losses.
See Professor Jeff Macke's Wells Fargo, Banks Underowned And Overshorted.
From the Bull Pen: Bulls have been waiting for this rally and can go along for the ride. Their vehicle of choice may be the financial ETF (XLF).
From the Bear Cave: Bears have also been waiting for this, as conditions were ripe for a bear market rally. But one caveat to the bears before starting new shorts: As Professor Kevin Depew mentioned today on the Buzz & Banter, if history is any guide, an 80% correction in the banks certainly isn't out of the question.
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