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Warren Buffett And Jim Cramer See Eye-To-Eye On This Big Bank

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Warren Buffett And Jim Cramer See Eye-To-Eye On This Big Bank
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Editor's Note: The previous version of this article incorrectly stated Cramer's Charitable Trust owned shares of Wells Fargo.

There’s no question it has been a rough earnings week so far for big U.S. banks. Bank of America Corp (NYSE: BAC), Citigroup Inc (NYSE: C), JPMorgan Chase & Co (NYSE: JPM) and Wells Fargo & Co (NYSE: WFC) reported earnings this week, and shares of each stock are trading down.

 

However, two big names in the world of Wall Street believe that one of these four banks stands out from the crowd.

Cream Of The Crop

On Thursday, Jim Cramer reiterated his opinion that Wells Fargo is the bank to own of this bunch.

While Cramer believes that the continuation of the low interest rate environment could make things worse on all big banks (including Wells Fargo) in the near term, interest rates will inevitably rise eventually, he said.

What Sets Wells Apart

At first glance, it’s hard to understand what sets Wells Fargo apart from all the other big American banks since the financial crisis.

Related Link: Buffett: Why The US Has The 'Secret Sauce'

However, this chart tells a major part of the story: One look at the big banks’ tangible book values shows just how much Wells Fargo has outgrown its peers over the past decade in terms of assets.

The Biggest Shareholder

Perhaps Wells Fargo’s biggest fan is none other than Warren Buffett himself.

Berkshire Hathaway Inc (NYSE: BRK-B)'s largest holding is Wells Fargo, a stake that’s worth a staggering $23.5 billion.

Back in March 2011, Buffett pledged his long-term commitment to Wells Fargo on CNBC’s Squawk Box. “If they closed the stock market for 10 years and we owned Coca-Cola and Wells Fargo and some other businesses, it wouldn’t bother me.”

Less than four years into Buffett’s hypothetical decade-long commitment, Wells Fargo stock is up more than 60 percent.

Disclosure: the author owns shares of Wells Fargo and Bank of America.

Image credit: Ken Teegardin, Wikimedia

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