July 22, 2015
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VALUATION WATCH: Overvalued stocks now make up 55.59% of our stocks assigned a valuation and 21.74% of those equities are calculated to be overvalued by 20% or more. Twelve sectors are calculated to be overvalued--with seven at or near double digits.
Editor's Note: Due to travel, from July 15th-July 27th our free newsletters will be on a reduced publication schedule. There will be no free weekly newsletters. Free daily's will be published fewer times per week. Normal publication schedules will resume July 27th.
--Biggest is the Best?
ValuEngine BUY Wells Fargo is the Largest Bank in the World
Wells Fargo & Company (WFC) is a diversified financial services company providing banking, insurance, investments, mortgage and consumer finance services through stores, its Internet site and other distribution channels across North America as well as internationally.
We've seen some rough times for banks over the past seven years or so. The mortgage meltdown, risky derivatives trading, massive salary and bonuses for CEOs despite poor performance, money laundering, etc. Bankers took some hits--and rightfully so.
But, if you consider the industry with a more recent eye for performance, you find that share prices, along with profits, are up big time. Banks have begun to break out of the crisis-driven period thanks to a housing recovery, settlements with regulatory bodies for their more egregious missteps, and the overall economic performance of the United States.
One of the institutions that is leading the way is Wells Fargo. The bank is now the largest in the world and is hovering close to the milestone of a $300 billion market cap. Unlike some of its Wall Street-based brethren,
Wells Fargo largely eschews the risky trading and shenanigans favored in Manhattan.
The bank garners the lion's share of its profits from good "old fashioned" activities such as mortgages. It also keeps a tidier balance sheet--of all the major players Wells Fargo has the best capital reserves--as recently noted by the Fed. They avoid risky derivatives and don't play around in the "casino" with borrowed money. In other words, Wells Fargo is notable these days for doing what banks are supposed to do, in a conservative fashion, in a manner that rewards shareholders.
What a "crazy" idea ?!?!?!?!
ValuEngine continues its BUY recommendation on WELLS FARGO-NEW for 2015-07-21. Based on the information we have gathered and our resulting research, we feel that WELLS FARGO-NEW has the probability to OUTPERFORM average market performance for the next year. The company exhibits ATTRACTIVE Company Size and Sharpe Ratio.
Our Buy/Sell/Hold recommendations are based upon the 1-year forecast return figure. Using valuation and forecast figures, you can rank and rate our covered stocks against each other, to find out, in an objective and systematic way, the most attractive investment targets based on your own risk/reward parameters. We re-calculate the entire database every trading day, so you are assured that every proprietary valuation and forecast datapoint is as up-to-date as possible.
Below is today's more extensive data on WFC:
ValuEngine Forecast |
|
Target
Price* |
Expected
Return |
1-Month |
58.33 |
0.66% |
3-Month |
59.33 |
2.38% |
6-Month |
61.14 |
5.51% |
1-Year |
62.54 |
7.91% |
2-Year |
66.71 |
15.12% |
3-Year |
53.87 |
-7.04% |
Valuation & Rankings |
Valuation |
15.16% overvalued |
|
29 |
1-M Forecast Return |
0.66% |
1-M Forecast Return Rank |
90 |
12-M Return |
14.12% |
|
73 |
Sharpe Ratio |
0.96 |
|
91 |
5-Y Avg Annual Return |
15.74% |
5-Y Avg Annual Rtn Rank |
79 |
Volatility |
16.46% |
|
86 |
Expected EPS Growth |
3.16% |
|
29 |
Market Cap (billions) |
300.62 |
Size Rank |
100 |
Trailing P/E Ratio |
14.10 |
|
80 |
Forward P/E Ratio |
13.67 |
Forward P/E Ratio Rank |
67 |
PEG Ratio |
4.46 |
PEG Ratio Rank |
8 |
Price/Sales |
3.37 |
|
28 |
Market/Book |
1.99 |
|
52 |
Beta |
1.02 |
Beta Rank |
48 |
Alpha |
0.02 |
Alpha Rank |
67 |
As a bonus to our Newsletter readers,
we are offering a FREE DOWNLOAD of one of our Stock Reports
Read our Complete Detailed Valuation Report on Wells Fargo HERE.
Want To Know More About Our ValuEngine View Newsletter?
Looking for a monthly portfolio of stock picks which are objective and based on cutting-edge academic theory and Wall St.practice? Then subscribe to The ValuEngine View Newsletter.The ValuEngine View Portfolio is based on our highly-refined and tested ValuEngine Portfolio Strategies along with our proprietary quant-based composite scoring system. The ValuEngine View Newsletter is the product of sophisticated stock valuation and forecast models first developed by Yale Professor of Finance Zhiwu Chen.
The ValuEngine View Newsletter is the product of a sophisticated stock valuation model that was first developed by ValuEngine's academic research team. It utilizes a three factor approach: fundamental variables such as a company's trailing 12-month Earnings-Per-Share (EPS), the analyst consensus estimate of the company's future 12-month EPS, and the 30-year Treasury yield are all used to create a more accurate reflection of a company's fair value. A total of eleven additional firm specific variables are also used. In addition, the portoflio uses top picks from our Forecast Model. In essence, the portfolio is constructed with the best picks from our main propiretary models
Each month you will receive an electronic copy of our newsletter highlighting 15 potential long positions along with five alternate picks. Our investment strategies focus on dozens of fundamental and technical factors for over 8000 individual stocks, synthesize the data, and then come up with a portfolio. Each newsletter portfolio focuses on maximum potential returns so there are no diversity requirements. Each portfolio pick includes critical ValuEngine valuation and forecast data. These 20 total picks represent the most up-to-date equity assessments of our proprietary models.
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VE View vs. S&P 500 Index Past Five Years |
|
VE View |
S&P 500 |
Ann Return |
19.75% |
14.13% |
Ann Volatility |
21.06% |
11.13% |
Sharpe Ratio |
0.94 |
1.27 |
Sortino Ratio |
1.55 |
1.56 |
Max Drawdown |
-34.94% |
-11.14% |
The ValuEngine View Newsletter is derived from the ValuEngine Aggressive and Diversified Growth BenchmarkPortfolio Strategies. These strategies are the product of ValuEngine's academic research team and combine cutting-edge financial analysis and portfolio construction techniques with real-world Wall St. know how.
CLICK HERE to Subscribe to the ValuEngine View
The ValuEngine View Newsletter portfolio has 15 primary stock picks and five alternates and is re-balanced once each month. The ValuEngine View Newsletter is published near the middle of each calendar month. An equal amount of capital is allocated to each stock. The monthly returns are calculated from the closing prices on date of publication. The performance calculation does not include any transaction costs.
ValuEngine Market Overview
Summary of VE Stock Universe |
Stocks Undervalued |
44.41% |
Stocks Overvalued |
55.59% |
Stocks Undervalued by 20% |
17.79% |
Stocks Overvalued by 20% |
21.74% |
ValuEngine Sector Overview
|
|
|
|
|
|
|
|
-0.50% |
1.32% |
16.96% |
23.20% overvalued |
17.61% |
30.96 |
|
-0.93% |
0.57% |
6.52% |
17.63% overvalued |
-7.19% |
20.57 |
|
-0.49% |
-0.94% |
2.15% |
11.86% overvalued |
-1.19% |
22.55 |
|
-0.26% |
-0.06% |
7.97% |
9.21% overvalued |
-0.35% |
29.03 |
|
-0.98% |
-1.72% |
0.65% |
8.07% overvalued |
-3.80% |
25.28 |
|
-0.70% |
-0.98% |
3.98% |
7.84% overvalued |
-0.91% |
24.20 |
|
-0.34% |
-3.37% |
1.02% |
7.46% overvalued |
2.47% |
30.05 |
|
-0.46% |
-0.54% |
0.28% |
7.27% overvalued |
5.91% |
26.11 |
|
-0.22% |
0.24% |
3.17% |
6.59% overvalued |
2.04% |
17.63 |
|
0.40% |
-0.20% |
-2.31% |
1.95% overvalued |
-0.07% |
17.68 |
|
-0.21% |
-0.45% |
-0.78% |
0.74% overvalued |
-6.51% |
20.50 |
|
-0.38% |
-0.22% |
2.35% |
0.29% overvalued |
-1.58% |
23.44 |
|
-0.66% |
-1.34% |
0.13% |
0.59% undervalued |
-10.68% |
16.11 |
|
-1.00% |
-3.43% |
0.18% |
3.65% undervalued |
-10.95% |
19.51 |
|
0.41% |
-9.34% |
-9.71% |
10.88% undervalued |
-40.98% |
22.19 |
|
0.02% |
-7.51% |
-8.84% |
15.50% undervalued |
-26.43% |
23.76 |
ValuEngine.com Products and Services
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