Lead Portfolio Manager Hamilton Reiner of J.P. Morgan Asset Management has an overweight position in Wells Fargo & Co (WFC), which he says is one of the best banks in the sector.
“With not a lot of interest rate sensitivity, the bank has run their mortgage business well and grown significantly, including the Wachovia acquisition during the crisis, which was a strategic and accretive deal. We are big fans of the company,” Reiner says.
Hamilton Reiner
Reiner says Wells Fargo has the ability to manage its balance sheet to continue to buy back stock and raise dividends, and has grown from a super-regional bank to one with a global footprint.
“They are monetizing and managing their mortgage business, and growing out their capital markets business. They have had positive net interest margins in the way they manage the bank’s portfolio,” he adds.
As interest rates go higher, Reiner believes Wells Fargo is positioned well.
“Because at some point, maybe as early as December, the Fed will raise its rates. It is important to not just be positioned for where rates are today, but where they are going forward as well,” Reiner says.
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