Richard Davis, a director at Wells Fargo (WFC), recently bought 3,500 shares. The buy increased his holdings by 470 percent, and came to a total cost of $144,270.
This is the first insider buy since July 2022, when the company’s general council bought 97 shares for about $4,200. One other director made a small buy around the same time, also for less than 100 shares. A company vice president was a seller in February, otherwise, insiders have been fairly inactive.
Overall, Wells Fargo insiders own 0.1 percent of shares.
The stock is down about 12 percent over the past year, as rising interest rates and a banking crisis in the spring have impacted most bank stocks negatively.
However, Wells has managed to grow revenues by 5 percent, and earnings by over 60 percent, in spite of a weak lending environment.
At current prices, shares trade at a slight discount to their book value, and at just over 8 times forward earnings.
Action to take: Wells Fargo trades at a reasonable value today, and could trend higher as uncertainty in the banking sector wanes. At current prices, Wells pays a 3.4 percent dividend with room for future payout growth.
For traders, the January 2024 $42.50 calls, last going for about $1.25, could see mid-to-high double-digit returns in the coming weeks from a year-end rally in Wells stock.
Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any of the companies mentioned in this article.