Wells Story

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WFC -- USA Stock  

USD 23.28  0.03  0.13%

Wells Fargo is scheduled to announce its earnings today. The next earnings report is expected on the 12th of January 2021. The stock is undergoing above-average trading activities. Wells Fargo Average Assets are projected to increase significantly based on the last few years of reporting. The past year's Average Assets were at 1.71 Trillion. The current year Average Equity is expected to grow to about 194.7 B, whereas Net Income Per Employee is forecasted to decline to about 71.5 K. As many of us are excited about financial services space, it is fair to go over Wells Fargo as a unique alternative. We will evaluate why recent Wells Fargo price moves suggest a bounce in November.
Published over a week ago
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How much will Wells Fargo owe in November?
The company has 307.9 B in debt with debt to equity (D/E) ratio of 8.26, demonstrating that Wells Fargo may be unable to create cash to meet all of its financial commitments. The asset utilization indicator refers to the revenue earned for every dollar of assets a company currently reports. Wells Fargo has an asset utilization ratio of 3.51 percent. This suggests that the company is making $0.0351 for each dollar of assets. An increasing asset utilization means that Wells Fargo is more efficient with each dollar of assets it utilizes for everyday operations.
Wells Fargo financial leverage ratio helps determine the effect of debt on the overall profitability of the company. It measures the total debt position of Wells Fargo, including all of Wells Fargo's outstanding debt obligations, and compares it with the equity. In simple terms, the high financial leverage means the cost of production, together with running the business day-to-day, is high, whereas, lower financial leverage implies lower fixed cost investment in the business and generally considered by investors to be a good sign. So if creditors own a majority of Wells Fargo assets, the company is considered highly leveraged. Understanding the composition and structure of overall Wells Fargo debt and outstanding corporate bonds gives a good idea of how risky the capital structure of a business is and if it is worth investing in it. Please read more on our technical analysis page.

Understanding Wells Total Debt

Wells Fargo liabilities are broken down into two parts on the balance sheet. These are short-term (or current) obligations and long-term debt. Wells Fargo has to fulfill its short-term liabilities in this reporting year and should be no more than 12 months old. Long-term debt, on the other hand, is anything beyond the 12-month payment timeframe. Common short-term liabilities found on Wells Fargo balance sheet include debt obligations and money owed to different Wells Fargo vendors, workers, and loan providers. Below is the chart of Wells main long-term debt accounts currently reported on its balance sheet.
You can use Wells Fargo financial leverage analysis tool to get a better grip on understanding its financial position

How important is Wells Fargo's Liquidity

Wells Fargo financial leverage refers to using borrowed capital as a funding source to finance Wells Fargo ongoing operations. It is usually used to expand the firm's asset base and generate returns on borrowed capital. Wells Fargo financial leverage is typically calculated by taking the company's all interest-bearing debt and dividing it by total capital. So the higher the debt-to-capital ratio (i.e., financial leverage), the riskier the company. Please check the breakdown between Wells Fargo's total debt and its cash.

What do experts say?

Stock analysis is a method for investors and traders to make buying and selling decisions. By studying and evaluating past and current data, investors and traders attempt to gain an edge in the markets by making informed decisions. It is good to see analyst projects for Wells Fargo, but it might be worth checking our own buy vs. sell analysis

Wells Fargo exotic insider transaction detected

Legal trades by Wells Fargo insiders are very common, as founders, directors, or employees of any publicly traded firm often have stock or stock options. These trades are made public in the United States through the filing of Form 4 of the Securities and Exchange Commission. Below entry was recorded recently and is publicly available as an insider trade:
Wells insider trading alert for general transaction of common stock $1 23 par value by Santomassimo Michael P, Sr. EVP & CFO, on 23rd of October 2020. This event was filed by Wells Fargo Company with SEC on 2020-10-23. Initial filing of beneficial ownership - SEC Form 3 [view details]   
Note, although insider trading is legal, in the United States, Canada, Australia, and Germany, for mandatory reporting purposes, corporate insiders are defined as a company's officers, directors, and any beneficial owners of more than 10% of a class of the company's equity securities.

Another Deeper Perspective

Wells Fargo reported the last year's revenue of 62.66 B. Total Income to common stockholders was 3.93 B with profit before taxes, overhead, and interest of 82.46 B.
 2019 2020 (projected)
Net Income19.55 B18.75 B
Gross Profit76.05 B62.22 B

Is Wells Fargo slip permanent?

Kurtosis is down to 0.63. It may suggest a possible volatility slip. As of the 14th of October 2020, Wells Fargo maintains the Downside Deviation of 2.32, market risk adjusted performance of 0.2239, and Mean Deviation of 1.61. Relative to fundamental indicators, the technical analysis model lets you check existing technical drivers of Wells Fargo, as well as the relationship between them. Specifically, you can use this information to find out if the company will indeed mirror its model of past data patterns, or the prices will eventually revert. We are able to interpolate and collect nineteen technical drivers for Wells Fargo, which can be compared to its rivals. Please check out Wells Fargo treynor ratio, as well as the relationship between the downside variance and kurtosis to decide if Wells Fargo is priced fairly, providing market reflects its latest price of 23.5 per share. Given that Wells Fargo has jensen alpha of 0.0099, we strongly advise you to confirm Wells Fargo's prevalent market performance to make sure the company can sustain itself at a future point.

Our Conclusion on Wells Fargo

When is the right time to buy or sell Wells Fargo? Buying stocks such as Wells Fargo isn't very hard. However, what challenging for most investors is doing it at the right time. Proper market timing is something most people cannot do without sophisticated tools, which help to isolate the right opportunities, deliver winning trades and diversify portfolios on a daily bases. With a somewhat neutral outlook on your 30 days horizon, it may be better to hold off any trading activity and neither take up new shares of Wells nor exit your existing holdings in the Stock. It seems the expected volatility has not yet been fully factored into the current price. Please use our equity advice module to run different scenarios to ensure your current risk level and investment horizon are fully reflective of your current investing preferences in regards to Wells Fargo.

About Contributor

This story should be regarded as informational only and should not be considered a solicitation to sell or buy any financial products. Macroaxis does not express any opinion as to the present or future value of any investments referred to in this post. This post may not be reproduced without the consent of Macroaxis LLC. Macroaxis LLC and Raphi Shpitalnik do not own shares of Wells Fargo. Please refer to our Terms of Use for any information regarding our disclosure principles.

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