• Warren Buffett appears to have made a similar mistake dumping Wells Fargo as the airlines earlier this year.
• Wells Fargo still trades below TBV and far below peer valuations now.
• The company has a path to replicating the 2019 EPS of $4+ with upside from eliminating $10 billion in costs.
• The stock is cheap at $28 based on $4+ EPS potential.
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As Wells Fargo (WFC) finally breaks out from the virus lows, the stock has plenty more upside. The Warren Buffett exit likely helped create an artificial low in the stock similar to the airlines earlier this year. My investment thesis remains bullish on the bank stock returning to pre-virus highs and beyond.

Image Source: Wells Fargo website

Another Mistake

Unfortunately for investors following Buffett, the investment genius appears to be causing lows in value stocks. Instead of loading up on airlines and banks at the lows, Berkshire Hathaway (BRK.B) (NYSE:BRK.A) dumped these stocks and pushed them even lower. Back as COVID-19 was raging in April, Buffett claimed on CNBC to have exited all of his airline positions. Berkshire had a nearly $9 billion position in airlines going back to just mid-March

A stock like Delta Air Lines (DAL) opened around $20.75 the following trading day and the stock is now trading at $42. While Berkshire Hathaway exited at higher valuations, anybody following his actions would've sold Delta closer to $20 as CNBC detailed these opening prices for airline stocks following the announcement by Buffett.

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