Wells Fargo & Co (WFC): What are Hedge Funds Doing With This Stock?

Wells Fargo & Co (NYSE:WFC) ha become one of the success stories in the banking industry as one of the few major players to have survived the 2008 market crash with no significant damage or wounds to heal. While it is not featured in all 50 states, ti has developed a strong national presence to put it on par with other large financial institutions like Bank of America Corp (NYSE:BAC) or JPMorgan Chase  & Co. (NYSE:JPM). But as the financial services and banking industries continue to grow, can Wells Fargo & Co remain a favorite stock play among the world’s best money managers?

Is Wells Fargo & Co (NYSE:WFC) a first-rate investment today? Investors who are in the know are reducing their bets on the stock. The number of bullish hedge-fund positions retreated by one in recent months.

Wells Fargo & Co (NYSE:WFC)

How have hedgies been trading Wells Fargo & Co (NYSE:WFC)?

Heading into this current quarter, 75 of the hedge funds tracked by our friends at Insider Monkey were bullish in this stock, a slight 1-percent decrease from the previous quarter. With hedge funds’ sentiment swirling, there exists a few notable hedge-fund managers who were boosting their holdings considerably.

When looking at the hedgies Insider Money monitors, Warren Buffett’s Berkshire Hathaway had the biggest position in Wells Fargo & Co (NYSE:WFC), worth close to $19.14 billion, accounting for 20.8 percent of its total 13F portfolio. On Berkshire Hathaway’s heels is Fisher Asset Management, managed by Ken Fisher, which held a $752.1-million position; 1.9 percent of its portfolio is allocated to the company. Remaining hedge funds with similar optimism include Tom Russo’s Gardner Russo & Gardner, Paul Ruddock and Steve Heinz’s Lansdowne Partners and Patrick Degorce’s Theleme Partners.

Due to the fact that Wells Fargo & Co (NYSE:WFC) has faced bearish sentiment from the entirety of the hedge funds on Insider Monkey’s radar, it’s easy to see that there was a specific group of money managers that elected to cut its positions entirely last quarter. Interestingly, Leon Cooperman’s Omega Advisors said goodbye to the biggest stake of all the hedgies watched, valued at about $68.3 million in stock, and Charles Clough of Clough Capital Partners was right behind this move, as the fund cut about $37.8 million worth. These bearish behaviors are intriguing to say the least, as total hedge-fund interest dropped by one fund last quarter.

What do insiders think about Wells Fargo & Co (NYSE:WFC)?

Bullish insider trading is best served when the company we’re looking at has experienced transactions within the past six months. Over the latest half-year time period, Wells Fargo & Co (NYSE:WFC) has experienced zero unique insiders buying and nine insider sales (see the details of insider trades here).

Let’s also examine hedge-fund and insider activity in other stocks similar to Wells Fargo & Co (NYSE:WFC). These stocks are Toronto-Dominion Bank (USA) (NYSE:TD), Mitsubishi UFJ Financial Group Inc (ADR) (NYSE:MTU), Bank of America Corp (NYSE:BAC), Citigroup Inc. (NYSE:C) and JPMorgan Chase & Co. (NYSE:JPM). This group of stocks belong to the money-center banks industry and their market caps match WFC’s market cap.

Company Name # of Hedge Funds # of Insiders Buying # of Insiders Selling
Toronto-Dominion Bank (USA) (NYSE:TD) 13 0 0
Mitsubishi UFJ Financial Group Inc (ADR) (NYSE:MTU) 12 0 0
Bank of America Corp (NYSE:BAC) 91 0 3
Citigroup Inc. (NYSE:C) 115 1 3
JPMorgan Chase & Co. (NYSE:JPM) 104 0 8

With the returns exhibited by Insder Monkey researchers, everyday investors should always pay attention to hedge-fund and insider-trading sentiment, and Wells Fargo & Co (NYSE:WFC) stock is an important part of this process.


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