Is Wells Fargo Stock a Buy?
It's been a rough few years for banking giant Wells Fargo (NYSE: WFC). The problems started with a 2016 fraud investigation that revealed employees had opened millions of fake accounts without telling its customers in order to meet sales goals, violating consumer protection laws. The company has been hit with billions of dollars in fines and lawsuit settlements as a result of the case.
The scandal also caused losses in earnings, customers, and its reputation. The stock has underperformed the S&P 500 for each of the past five years and has a five-year annualized return of negative 3.7% over that period. It also led to leadership instability as CEO John Stumpf retired shortly after the scandal broke in September 2016, and his replacement, CEO Tim Sloan, resigned in May 2019, unable to turn things around.
This year, the woes continue as the company learned in February that it was hit with a $3 billion fine by federal authorities over the scandal. Also, on March 5, Democratic lawmakers on the House Oversight Committee released a report that said Wells Fargo executives did not adequately improve oversight or take the proper steps to prevent further abuses, following a year-long investigation. The stock price was down about 5% on the day following the news and is down about 26% year-to-date, to around $34 per share.
Source Fool.com
