Why Buffett Loves Wells Fargo

There’s no question that Warren Buffett has fully embraced the adage that you can never get enough of a great thing.

This certainly helps to explain why Warren Buffett recently decided to put more money into his holding of Wells Fargo in the amount of $350 million, which we have heard him describe as his favorite bank. Buffett began picking up shares of Wells Fargo when the stock was even trading around its all-time high this year. He obviously sees this bank as one that fits into his purchase wonderful company strategy at a low and fair price.

There are many people following the big investment moves that Warren Buffett makes, so it’s always fun and exciting to find out where he puts his cash to work. Even though Berkshire Hathaway hired Ted Weschler and Todd Combs as money managers, Buffett is still in charge of the largest stakes of the company. Wells Fargo is the largest outside investment that Berkshire Hathaway owns as of late 2012.

Berkshire Hathaway has raised its stake in Wells Fargo by 2% to reach 470.3 million shares. They raised their stake in IBM by 3% to 79.6 million shares. And U.S. Bancorp shares have risen to 83.8 million shares, which is a 5% increase, according to the most recent regulatory filing. To contrast this, Warren Buffett did not add to his stake in Coca-Cola, which was once the largest Berkshire Hathaway holding, and he has not added to this stake since the mid-1990s.
Berkshire Hathaway is currently the largest shareholder in Wells Fargo and as of Tuesday they own a 9% stake in the company worth $26.5 billion.

Buffett has liked Wells Fargo for a long time because of its focus on Main Street banking. John Stumpf, CEO and chairman of Wells Fargo, alluded to this in a 2013 interview when he mentioned to the San Francisco Business Times that the bank is going to continue “serving real customers in the real economy.

“Sometimes it’s helping Warren Buffett in his purchase of Heinz, or helping a customer get a mortgage,” said Stumpf. “We help people build buildings. We help people retire or buy a home or start a business.”

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