Is Today the Right Time to Buy Wells Fargo?
During the coronavirus pandemic, the financial sector has been one of the worst performing parts of the stock market, down by about 12% year to date versus an 11% gain in the S&P 500. And there are good reasons for this: Investors are worried about what elevated unemployment and low interest rates could mean to banks' bottom lines.
Wells Fargo (NYSE: WFC) has been one of the major laggards in this beaten-down sector, dramatically underperforming its big-bank peers. Because it doesn't have a substantial investment-banking business to help offset consumer banking losses (investment banking tends to do better in turbulent markets), Wells Fargo is more susceptible to the effects of the pandemic than the other big banks.
And remember: This comes on the heels of several years of underperformance before the pandemic, as Wells Fargo's numerous scandals have tarnished its reputation and caused many investors to abandon the stock.
Source Fool.com
