We all know about the problems with the bankers at Wells Fargo, but are the brokers through Wells Fargo Advisors in the clear? It turns out that there are many areas of concern that investors should be aware of. The group argued against the fiduciary ruling, which means the advisor must put the client’s best interests first. Annuities are products that have recently been under scrutiny due to their high commissions for brokers. It turns out that Wells Fargo was the number 1 seller of annuities in the country last year. In a recent study from the University of Minnesota and University of Chicago analyzing 100 companies, Wells Fargo had the 3rd worst record of misconduct, as 15% of representatives had an instance of misconduct on their record. In a separate study analyzing 210 firms, Wells Fargo ranked 24th worst on the list when it came to causing investors harm. The poor rankings may be due to some poor customer service instances that have occurred at the company. This includes brokers not overseeing accounts that were listed as non-discretionary, providing verbal advice that an investment was safe then explaining that it was merely an opinion that they are not liable for, and making the transfer process difficult when clients discontinue services with the company. At Wilsey Asset Management, we handle money transfers coming in on a regular basis, and they should be relatively seamless to handle. Just because a broker is backed by a large name like Merrill Lynch, Morgan Stanley, or Wells Fargo does not mean your investments are safe.
Today’s company of the day is Molson Coors Brewing Company (TAP). The current price is $107.65 and the 52-week range is $78.17-$111.24. The company produces beers such as Coors Light, Blue Moon, Dos, Equis, Heineken, and Miller to name a few. Sales have fallen 8.9% over the last 12 months and EPS has fallen 6.2% during the same timeframe. The balance sheet looks strong, as the company has a liquid current ratio of 2.44 and low debt/equity of 30.7%. We were surprised to see a tangible book value of 7.76, as many companies in the industry have one that is not material due to acquisitions. Looking forward to December 2017, estimated EPS of $5.22 gives us a target sell price of $86.13. So while you may have a cold Coors this weekend, this company does not appear to be a good long-term investment.
We hope you enjoyed this edition of the Smart Investing Daily Briefing. If you would like to find out more about our upcoming Smart Investing Workshop Breakfast on October 22nd, call our office at (858) 546-4306 or contact us at our website SmartInvesting2000.com