Sold Wells Fargo – 34.59% Annualized Return Wells Fargo crossed the $57 per share threshold this afternoon just after 2PM ET. The last time Wells Fargo hit $57 per share was back in February 2022. The only issue holding Wells Fargo from achieving more than $65 per share is the restriction imposed by the Federal …
The Value Investment Fund paid $39.51 per share including transaction fees of $1 per share for Wells Fargo. Total investment was $15,804. The Fund now holds 500 shares of Wells Fargo.
One of the advantages of value investing utilizing pools of similar stocks from a single industry is that every now and then, like once a decade, a unique opportunity will present itself to take advantage of the knowledge and hard financial analysis work one does. In this case, it happened today. Comerica Bank experienced a roller coaster price drop and recovery in one day. It’s intrinsic value was calculated to be greater than $40 per share and the price dropped this morning to just below $30 per share.
Today, the Value Investment Fund took advantage of the chaos in the banking industry and purchased 1,200 shares of Comerica Bank after the the share price dropped below $30 per share.
The Value Investment Fund sold its position in Wells Fargo in preparation for two sets of PUTs that the Fund will have to comply with the terms of the PUT contracts.
Yesterday, May 3rd, 2022, the Value Investment Fund sold 246.9135 PUTs on JPMorgan Chase & Co. with a strike price of $80 per share. These PUTs expire on June 16, 2023 (13 months).
Overall, Bank of New York Mellon is in good financial condition and even with the adjustment for a reduction in revenue tied to Russian transactions, the bank will regain market value once the entire market shifts towards a positive position in comparison to the various index values on 12/31/21.
One year ago on January 12, 2021, the Value Investment Fund purchased its first tranche of Wells Fargo Bank. At that time, shares were purchased for $33.24.
Financial institutions, including banks, are highly regulated, extremely leveraged, and susceptible to interest rate fluctuations. Due to this unique exposure, calculating intrinsic value for bank stocks requires modification of the most popular valuation models.
The banking pool of the Value Investment Fund purchased 232.9373 shares of Bank of New York Mellon Corporation trading at $41.93 at close of business on Friday January 22, 2021.
