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Thursday, February 21, 2013

SANFRANSISCOBUSINESSTIMES: Wells Fargo becomes Warren Buffett's biggest holding


Feb 20, 2013, 11:25am PST 



Senior Reporter-San Francisco Business Times



Warren Buffett's voracious appetite for shares of Wells Fargo in recent years has made the San Francisco bank his biggest investment in a public company.
Wells pushed aside long-standing top holding Coca-Cola, a stake Buffett purchased from late 1987 to 1995 as he decided the value of the company's powerful global brand wasn't reflected in its share price. The fact that the beverage giant remained Berkshire's top holding for years shows how well it has performed for Buffett.
Buffett has been adding to Wells for several years in a move that prompted me to write last November that the bank was on track to becoming Buffett's largest holding.
The latest regulatory filing by Buffett'sBerkshire Hathaway (NYSE: BRK-A) (NYSE: BRK-B) (NYSE: BRK) shows that Buffett added 17.3 million Wells Fargo shares in the last quarter, bringing his total holdings to 439.8 million shares. Buffett has long been the bank's largest shareholder.
His Wells stake is worth about $15.5 billion, while the Coke (NYSE: KO) stake is valued at $14.7 billion.
No doubt Buffett will devote a few words to Wells Fargo in this year's letter to Berkshire shareholders, being distributed after the market closes on March 1.
In last year's letter, Buffett told his shareholders, "Wells Fargo is prospering. Its earnings are strong, its assets solid and its capital at record levels."
In the past, Buffett has said Wells is his favorite bank, citing the bank's low-cost of funding, which is a powerful advantage in the busines of lending. No wonder, Wells Chairman and CEO John Stumpf says he starts his day reviewing the bank's deposit figures.


Wells, (NYSE: WFC) the nation's fourth largest bank by assets, recently relinquished the title of most valuable bank back to J.P. Morgan Chase. (NYSE: JPM)
Still, I stick by my prediction of early 2011 in which I said Wells could one day be the nation's largest bank.
A big step in that direction was Wells Fargo's 2008 purchase of troubledWachovia. That deal came with plenty of mortgage woes, but it also turned Wells into a truly national bank.
So I was surprised to read over the weekend that one analyst criticizes the Wachovia purchase as one of Wells Fargo's few major missteps.
I suspect that sentiment might spur Buffett to pick up a few million more shares.
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1 comment:

QUALITY STOCKS UNDER 5 DOLLARS said...

I have never been a fan of bank stocks. I have never invested in a bank stock. The tarp warrants issued to the government by the large banks during the bank bailout are I think one of the best ways to get in on a recovery in the banking sector without putting a large amout of money in any stock. Some of the tarp warrants currently trade at just under 10 cents and do not expire until october of 2018.