Wells Fargo (NYSE:WFC), the embattled American banking giant, has seen its stock price slump as the company has come under fire for a customer-accounts scandal in which employees created fake accounts unbeknown to its clients.
But Adam Johnson, founder of Bullseye Brief, said he recommends bargain hunters buy the stock at its discounted price.
“What Wells Fargo did may be deplorable…it’s not debilitating,” he told the FOX Business Network’s Stuart Varney on Tuesday. “You had fewer than 1% of the employees create false accounts for fewer than 1% of the customers.”
Johnson went on to explain that while Wells Fargo netted $5 million from the scandal, it has already paid $185 million in fines, which included a $100 million penalty from the Consumer Financial Protection Bureau (CFBP).
“This is a company, a bank, that earns $20 billion a year. It underwrites one quarter of the mortgages in this country,” Johnson explained. “If every single state did what California did and said, ‘We’re not going to do our municipal underwritings with you,” it would cost them $100 million in loss fees.”
Johnson said at $43.97 a share, a 16% drop from where it traded a year ago, Wells Fargo stock is cheap and retail investors should take the opportunity to get in now.