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Wells Fargo (NYSE:WFC) is a tremendous bargain today. Wells Fargo stock, which was trading at $26.30 this afternoon, is selling for just 80% of its tangible book value per share (TBVPS) of $32.90.Source: Ken Wolter / Shutterstock.com To put it succinctly, that valuation is simply too low. Let's assume the very worst happens: somehow Wells Fargo will have to write off so many loans that its book value falls to its present stock price.First of all, that suggests that loans worth 17.3% of the whole company's shareholder value will be written off. Since its book value is now $182.7 billion, under that scenario, $31.5 billion of loans will go under. That means that the bank will have to assume that the loans will never be repaid and write them off as charge-offs. That seems almost impossible.InvestorPlace – Stock Market News, Stock Advice & Trading TipsEven during the financial crisis in 2008, Wells Fargo's book value did not decline. It actually increased from 2007 to 2008 and through 2009. So contemplating a 17.3% decline in the bank's book value seems almost absurd. But that is how the stock market is pricing WFC stock today.Another reason why the price today seems out of whack is that even in the last recession, the bank's stock price got down to about $12 per share. But its book value was $16.09 per share, according to Value Line Research. * 7 Red-Hot Vaccine Stocks Racing to Develop a Coronavirus Cure Wells Fargo stock did not change hands for 75% of the bank's book value for very long. When the economy started to improve, it quickly shot up to 100% of book value per share and then rose further.The economy is now starting to improve. The bank's stock price should soon start to reflect that reality. Based on Wells Fargo's present TBVPS of $32.09, the stock looks poised to gain about 22%. The Bank's Dividend Yield Implies a Potential Gain of 41%Wells Fargo pays an annual dividend of $2.04 per share. On April 28, it declared a quarterly dividend of 51 cents per share. Its dividend yield stands at 7.5%.But the company has not decided to cut its dividend. It has made no mention of doing so, even though it suspended its share buybacks.Analysts, on average, expect its earnings per share to come in at $1.43 this year. But that includes a whopping $3 billion reserve hit (equivalent to almost 73 cents per share) to the bank's earnings. However, if the bank does not take such a hit, it will have enough funds to cover its dividend. Its EPS for 2021 is expected to be $2.58, according to Seeking Alpha. So it will be able to cover its dividend next year.Therefore, I don't believe the bank will cut its dividend this quarter. Even if it does, I doubt whether its dividend will stay below its current level for very long.Therefore, based on Wells Fargo's historical dividend yield, at what price should the stock be trading? According to Seeking Alpha, its average dividend yield in the past four years was 3.49%.That indicates that the stock should be trading at $58.45 (i.e. $2.04 divided by 3.49%), not $26.30. But let's assume that the stock's current yield should be 50% higher than its historical level. After all, the economy will undergo a U-shaped recovery, and it will take awhile before the stock recovers.That implies the dividend yield now should be 5.5% or so (halfway between 3.5% and 7.5%). That means the stock should be at least $37 per share. That represents a gain of 41%. Merging the Two Implied Values for Wells Fargo StockAs we have seen, the true value for Wells' stock, based on its book value per share, should be $32.09. That's about 22% above today's price.Using a modified historical dividend yield approach, the stock is worth $37 per share, a gain of 41%.The average of these two target prices is $34.55 per share. So look for the shares to gain 31% over the next year or even earlier.One positive catalyst for the shares could be the June release of the company's stress tests by the Federal Reserve. I wrote about that in my earlier article, which was published last month. I don't believe the Federal Reserve is going to force the bank to cut its dividend to preserve capital.Therefore, Wells Fargo stock seems to provide conservative investors with a large margin of safety. That's especially true now because it sells for such a huge discount to its tangible book value.As of this writing, Mark Hake, CFA does not hold a position in any of the aforementioned securities. Mark Hake runs the Total Yield Value Guide which you can review here. More From InvestorPlace * Top Stock Picker Reveals His Next 1,000% Winner * The Huge Story for 2020 & Beyond That You Aren't Hearing About * Revolutionary Tech Behind 5G Rollout Is Being Pioneered By This 1 Company * The 1 Stock All Retirees Must Own The post Wells Fargo Stock Is Too Cheap appeared first on InvestorPlace.

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Yahoo Finance’s Brian Sozzi, Alexis Christoforous, and Heidi Chung break down the market action for Costco.

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Stocks closed at their highest levels since at least March, ending Friday’s volatile session mostly higher after President Donald Trump announced retaliatory measures against China that were less negative for markets as some had feared. Myles Udland, Sean Smith, Rick Newman, and Akiko Fujita discuss on The Final Round.

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Bankrate.com released a survey noting that 31 million Americans have or plan to tap into their retirement savings because of the COVID-19 pandemic. Joining The Final Round to discuss the survey further is Bankrate.com’s Chief Financial Analyst Greg McBride.

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The global economy is beginning to reopen, and that is very good news. Oil stocks were under pressure even before the pandemic hit, but things got worse as lockdowns began. Demand fell of a cliff, and even Exxon Mobil (NYSE:XOM) stock took a plunge.Source: Michael Gordon / Shutterstock.com At one point, Exxon Mobil stock was trading at levels not seen in 20 years.But, hope springs eternal. That hope is the only reason I can think of for investors to even consider buying Exxon Mobil stock today. Oil prices are rising. But it's hard to see prices moving to levels that would justify a long-term investment.InvestorPlace – Stock Market News, Stock Advice & Trading TipsIf you were brave enough to buy shares of Exxon Mobil on March 23, you've been rewarded with a nearly 40% gain. However, that gain can be chalked up to fishing in a barrel. While oil demand is likely to remain suppressed for some time, nobody expected prices to stay as low as they were.The questions seem to be how high will oil rise and how long will it take to get there? But if you're thinking of using rising oil as a reason to buy Exxon Mobil stock, you may want to reconsider. Don't Count on Oil to Save Exxon Mobil StockIf you look at the historical track of XOM stock with oil prices, a pattern emerges. When oil prices are low, there is a larger delta between the two prices. However, that delta narrows significantly the higher that crude prices go. * 7 Red-Hot Vaccine Stocks Racing to Develop a Coronavirus Cure So let's put it in simple terms. Crude prices have risen nearly 200% in the last month. In that same period of time, Exxon Mobil shares have climbed about 40%. And as of this writing, Exxon trades about 50% higher than the price of a barrel of oil.But if you look back to April 2019, when crude was trading around $65 per barrel, shares of XOM were around $80. It's a premium for sure, but much less than what you're getting today.But that's just one data point. Let's look at another. At the beginning of October 2018, crude oil was trading at around $76 per barrel. Investors could have snagged shares of Exxon Mobil stock for around $85. Do you see the point I'm trying to make?The conventional wisdom says that the rising price of crude is a tide that will lift all boats. And while that may be true on some levels, it has not been the case in terms of the price of Exxon Mobil stock. The Juice Isn't Worth the SqueezeBut wait you say, crude prices wouldn't have to rise that much higher for XOM stock to reach $60. And that would be a nice gain from its current level. Sure, all of that is true, but it's also relying on a lot of things to go right.JPMorgan Chase (NYSE:JPM) CEO Jamie Dimon recently predicted a "fairly rapid" recovery for the U.S. economy. But that is no guarantee that the price of oil is set to return to anything close to the kind of juice Exxon needs for growth. First of all, there is still a glut of oil on the market. Then you have to look at headwinds on the demand side.First, it's hard to estimate how many workers may decide that they want to continue working from home. And that number may increase if kids aren't allowed to go back to school in the fall.Second, business travel is likely to decline in the short term. And even for those companies that want to do business overseas, they may find that international destinations are not available. Will domestic travel be enough to overcome that? What about if airlines are required to enact strict social distancing protocols?And then there is the question of what demand will be for taking a cruise. All of these questions will have a profound effect on the direction of oil prices. And the futures market is saying not so fast. At the time of this writing, the highest price for crude on the futures market is the March 2021 contract which is currently at $35.93. The Bottom Line: It Costs Too Much to Get XOM WrongAt times investing can be very simple. In the case of Exxon Mobil stock, the fundamental question is, what is the cost of being wrong? Exxon recently froze its dividend. That in itself is not the problem. It's a prudent move in uncertain times. However, Exxon is borrowing money to pay for the existing dividend. That rarely works out well. And, even if oil does move higher, the cost of servicing the debt will be an additional anchor on stock prices.But once again ask yourself this question: Would a company freeze its dividend if it expected revenue to increase?Exxon Mobil has one of the lower debt-capital ratios in the oil industry. And unlike other oil stocks, there's little doubt that Exxon Mobil will live to fight another day. But even if you believe that the worst is over for Exxon Mobil stock, less bad is no reason to buy.If you're an investor that's looking for capital growth, you have probably missed your window. And now with a dividend freeze, I expect value investors will start looking for the door. If you're currently investing in the stock, I suggest you do the same.Chris Markoch is a freelance financial copywriter who has been covering the market for over five years. He has been writing for InvestorPlace since 2019. As of this writing, Chris Markoch did not hold a position in any of the aforementioned securities. More From InvestorPlace * Top Stock Picker Reveals His Next 1,000% Winner * The Huge Story for 2020 & Beyond That You Aren't Hearing About * Revolutionary Tech Behind 5G Rollout Is Being Pioneered By This 1 Company * The 1 Stock All Retirees Must Own The post Keep It Simple and Avoid Exxon Mobil Stock appeared first on InvestorPlace.

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In this article we will check out the progression of hedge fund sentiment towards Phillips 66 (NYSE:PSX) and determine whether it is a good investment right now. We at Insider Monkey like to examine what billionaires and hedge funds think of a company before spending days of research on it. Given their 2 and 20 […]

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Good Judgment CEO Warren Hatch joins Yahoo Finance’s On The Move panel to discuss how his company’s ‘Superforecasters’ are predicting the impact of COVID-19 on the U.S. economy.

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Since falling to an $8.25 low in April, American Airlines Group (NASDAQ:AAL) is holding the $10.00 level. Markets have a wait and see approach on AAL stock because its business recovery depends on passenger traffic rebounding.Source: GagliardiPhotography / Shutterstock.com Realistically, investors should expect a sustained uptrend in air flight demand in the coming weeks. Businesses are opening across the United States, and as companies hire back staff and at-home workers travel, expect business travel levels increasing.In the last week (week of May 18 – 22, 2020), the Transportation Security Administration reported that total travel throughput increased by around 33%. This is also more than triple from the April lows.InvestorPlace – Stock Market News, Stock Advice & Trading TipsDate Total Traveler Throughput Total Traveler Throughput (1 Year Ago – Same Weekday) 5/22/2020 348,673 2,792,670 5/21/2020 318,449 2,673,635 5/20/2020 230,367 2,472,123 5/19/2020 190,477 2,312,727 5/18/2020 244,176 2,615,691 Data courtesy of TSAThe airline industry has a long way to go before it reaches last year's traveler count in the millions. Cargo Flights Positive for AAL StockInstead of waiting for passenger traffic levels to recover, American Airlines expanded its all-cargo international flights. It now operates 140 weekly all-cargo flights. By "medical supplies, personal protective equipment (PPE), perishables, and other time-sensitive freight around the world," American Airlines is playing a role in fighting the spread of Covid-19, which could help keep AAL stock from falling too much further. * 7 Red-Hot Vaccine Stocks Racing to Develop a Coronavirus Cure At a time when cross-border trading and transport are sharply reduced, American is in a good position to keep such essential goods as medical equipment and food supplies sent to places that need it. And in a post-Covid-19 world, AAL may want to continue growing its cargo transport business. It has retired Boeing (NYSE:BA) 767s that are being turned into cargo planes.Airlines for America endorsed plans to include temperature checks of passengers and airline and airport employees.Although this does not eliminate the risk of spreading the coronavirus, it will at least discourage people who are ill from boarding a plane. Still, the temperature check is not fool-proof. For example, this study in Pittsburgh found that 5% to 20% of subjects who had been exposed to the coronavirus only noticed none to mild illness.The Centers for Disease Control may mandate airports to check temperatures. Any prevention tool available will help minimize spreading the virus as the economy opens.Adding staff to screen passengers, wipe down planes, offer masks, gloves, and hand sanitizer will add to the airline's costs. AAL will likely pass the costs to its customers. And when more flights resume and run at lower capacity, it may increase plane ticket prices. This is a necessary step in operating the business at above break-even levels. AAL Stock Fair ValueInvestors may build a 5-year discounted cash flow model: EBITDA exit model. Assume revenue plunging in the next two fiscal years and then recovering thereafter:(USD in millions) Input Projections Fiscal Years Ending 19-Dec 20-Dec 21-Dec 22-Dec 23-Dec 24-Dec Revenue 45,768 18,307 10,984 17,026 26,390 38,265 % Growth 2.80% -60.00% -40.00% 55.00% 55.00% 45.00% EBITDA 6,207 -4,088 2,746 3,405 6,597 8,610 % of Revenue 13.60% -22.30% 25.00% 20.00% 25.00% 22.50%Data Courtesy of FinboxAt a discount rate of 7%, American Airlines stock is worth around $13 a share. On Wall Street, 17 analysts rating the stock have an average price target of around $14.00. Investors need to balance their optimistic view of a sales rebound next year against the average sales growth in the sub-3% range: Stock Industry S&P 500 Growth Score 56 69 75 Sales Growth Sales Growth Next Year 53.70% 46.20% 11.30% Sales 1‑Year Chg (%) -2.30% 8.10% 17.20% Sales 3‑Year Avg (%) 2.70% 9.90% 12.20% Data Courtesy of Stock RoverAs shown above, American's growth trails that of the S&P 500. The good news is that its sales growth will outpace the industry next year. Your TakeawayInvestors should watch daily TSA passenger data as well as the progress of the re-opening in the United States. The more businesses re-open, the greater the need to travel domestically, whether for business or tourism.Along with social distancing practices on all flights, passengers will feel at ease when boarding a plane.Disclosure: As of this writing, the author did not hold a position in any of the aforementioned securities. More From InvestorPlace * Top Stock Picker Reveals His Next 1,000% Winner * The Huge Story for 2020 & Beyond That You Aren't Hearing About * Revolutionary Tech Behind 5G Rollout Is Being Pioneered By This 1 Company * The 1 Stock All Retirees Must Own The post It Looks as If American Airlines Stock Is Set for a Big Return Next Year appeared first on InvestorPlace.

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