At The Motley Fool, we're buy-and-hold investors, but before we can hold a stock, we have to pick the stock. So our analysts are always on the hunt for strong new investment ideas. And every week, some businesses stand out from the crowd, which is why every Motley Fool Money episode includes host Chris Hill asking his guests -- this time, senior analysts Andy Cross and Jason Moser -- which companies they have their eyes on, and why.
Their picks for this episode: troubled financial giant Wells Fargo (NYSE: WFC) and the world's second-largest airline, Delta Air Lines (NYSE: DAL).
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*Stock Advisor returns as of April 1, 2019The author(s) may have a position in any stocks mentioned.
This video was recorded on April 5, 2019.
Chris Hill: Alright, let's get to the stocks on our radar this week. Jason Moser, you're up first. What are you looking at?
Jason Moser: Earnings season getting ready to kick off next Friday. Wells Fargo will announce earnings in the morning, ticker is WFC. We know that Tim Sloan is now out. The search for a new CEO is underway. This has really been such a poorly managed company now for a couple of years, and I'm sure that dated back to many years before we even found out what was really going on. What this has all done, regulators have given Wells Fargo a timeout. They put them in the corner. They said: "We're going to hit you with an asset cap. You're not allowed to grow until you can show us that you can behave yourself." This new CEO, which is going to be an external hire it looks like, is going to have to come in there and change that narrative a little bit. If they can do that, they can get this cap lifted, Wells Fargo probably has some better days ahead.
Hill: Steve, question about Wells Fargo?
Steve Broido: When is it time for investors to forgive a company? Wells Fargo broke the trust of people with the scandal that went on with them. When should investors forgive that?
Moser: That's a great question! I think that's the line that every investor has to figure out on their own. Some don't care about it as much than others. I think that's just a line you have to determine on your own.
Hill: Andy Cross, what are you looking at?
Andy Cross: Steve, forget about United Airlines. Look at Delta. They gave an update to their guidance for the quarter this week. I'm looking to see a little bit more clarity on what is driving its success. They updated their earnings guidance by about $0.15 to about $0.85 to $0.95 from $0.70 to $0.90. Revenue is up 7%. That's about what they were last quarter. Revenue per seat miles, they're moving progress there. That's going to be up 0% to 2%, probably closer to 2%. A lot going well with Delta. I want to hear some commentary on it.
Broido: What year does flying become joyous?
Cross: For you, not this year!
Hill: What do you want to add your watchlist, Steve?
Broido: I think Delta.
Andy Cross has no position in any of the stocks mentioned. Chris Hill has no position in any of the stocks mentioned. Jason Moser has no position in any of the stocks mentioned. The Motley Fool owns shares of and recommends Delta Air Lines. The Motley Fool has a disclosure policy.