Not Much Going Right For Wells Fargo Yet

When I last wrote about Wells Fargo (WFC) earlier this year, I thought the shares were undervalued, but that the company was going to need time to pull itself out of the hole it created with its fraudulent sales/account processes. Since then, the shares have continued to underperform peers like Citigroup (C), Bank of America (BAC), JPMorgan (JPM), PNC (PNC), and U.S. Bancorp (USB), as the bank's performance continues to underwhelm on multiple fronts.

Although the shares do still seem undervalued (in a relatively expensive banking sector), the weak trends in loan growth, interest margin expansion, and key fee-generating businesses are a concern to me. I do believe Wells Fargo's huge deposit base and strong market share across a wide swath of the country should, and does, count for something, as well as the bank's sizable middle market and asset-backed/equipment finance operations. For patient investors who can live with near-term underperformance, these shares are still worth consideration.

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Not Much Going Right For Wells Fargo Yet