Wells Fargo: Value or Value Trap?

I have recently been very critical of Wells Fargo (NYSE: WFC) because I believe the company did a poor job projecting loan losses in the second quarter, which left investors and most analysts surprised when the bank reported a $2.4 billion loss. But just because you don't like the way a company went about something doesn't mean that company lacks value. While it will be a long road to recovery, I still see Wells Fargo, one of the largest banks in the U.S., having serious value in the long term.

Image Source: Wells Fargo.

After Wells Fargo was found to have opened roughly 2 million fraudulent bank and credit card accounts, the Federal Reserve put it under an asset cap in 2018, limiting the bank to roughly $1.95 trillion in assets. This asset cap has been a nightmare for Wells Fargo, especially with the low-rate environment that saw interest rates quickly scoot back to zero in March.

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Source Fool.com