In the investment portfolio of Berkshire Hathaway (NYSE:BRK-A) (NYSE:BRK-B), the massive conglomerate run by Warren Buffett, you’ll find the stocks of more than 40 publicly traded companies. While there are several that look rather attractive right now, there are a few that stand out as especially good values.
With that in mind, here’s why investors might want to take a look at Wells Fargo (NYSE:WFC), Teva Pharmaceutical Industries (NYSE:TEVA), and one other stock that is perhaps the best value of all…
A solid bank at a fire-sale valuation
Wells Fargo has underperformed the rest of the financial sector over the past few years, and for good reason. The bank’s “fake accounts” and other various scandals have hurt the bank’s reputation and the Federal Reserve penalty that prohibits the bank from growing remains in effect.
However, after a couple years of having a “wait-and-see” attitude on the bank, I think it’s starting to look too attractive to ignore. For one thing, the bank is once again posting profitability numbers that are among the best in the business — in the second quarter, Wells Fargo delivered a 13.3% return on equity (ROE) and a 1.31% return on assets (ROA). Asset quality remains strong, with an annualized net charge-off rate of just 0.28%. These are the types of numbers investors have historically expected from Wells Fargo, which could indicate that it’s doing a good job of getting past its scandal-plagued few years.
Furthermore, Wells Fargo’s issues combined with generally poor performance from the financial sector as rates fall has produced an attractive valuation. Wells Fargo currently trades for a price-to-book multiple that we haven’t seen since 2011, and the stock yields an impressive 4.5% at the current price. Wells Fargo is…
Continue reading at THE MOTLEY FOOL