Warren Buffett Bullish on Mortgage Giant

September 4, 2013

Warren Buffett’s Berkshire Hathaway Inc. is increasing its stake in Wells Fargo. The billionaire investor increased his company’s stake in the nation’s largest U.S. home lender, adding 9.7 million shares of Wells Fargo stock in the three months that ended June 30 and spending $277 million. 

Buffett says it was an opportunity to buy stocks “on sale.” Wells Fargo’s stock has fallen 21 percent since Dec. 31. Berkshire holds more than $8 billion stake in Wells Fargo stock, Bloomberg reports.

Berkshire is the largest shareholder in Wells Fargo. Buffett’s shares have generated returns of about 29 percent over the last year, according to the site Seeking Alpha.

Banks have been under tighter regulation since the financial crisis but they can “still be plenty profitable,” Buffett says. 

Buffett’s moves are closely watched by the investment world. Buffett has been investing in stocks and takeovers while still-low interest rates limit returns on fixed income. 

Source: “Buffett Increases Wells Fargo Stake, Buys Stocks ‘On Sale,’” Bloomberg (Aug. 16, 2013) and “If Buffett Has A Large Position In Wells Fargo, You Should Also Buy It,” Seeking Alpha (Sept. 2, 2013)

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