As the American Economy Flexes its Muscles, this is the “Ultimate” Stock to Buy

Shah Gilani|April 15, 2021

Financials are the ultimate cyclical stocks.

And banks are the ultimate financial stocks.

The fact is, I love banks. And I’ve been touting them since last summer – indeed, I was ahead of the crowd on predicting their rebound.

I still chuckle over the good-natured grief I received last year from Fox Business News host Charles Payne when I appeared on his “Making Money” show and recommended financials.)

Today, Charles repeatedly congratulates me for having made that “call” before anyone.

The fact is that – by being ahead of the crowd in making banks stocks a “Strong Buy” – we reaped the big returns that stem from being first.

But if you missed that prediction – or maybe weren’t able to act on it – don’t be concerned: I still see the right bank stocks as big moneymakers for investors.

In fact, my newest call is an updated call on financials, on banks. And you – my Total Wealth followers – are hearing it first.

In yesterday’s TW – as part of our deep-dive look at the cyclical-stock beneficiaries of the strongest U.S. rebound in decades – I promised to bring you a stock play … and this one is a “stone-cold bargain”

Today, I’m keeping that promise.

It’s a stock that’s set to bring you a gain, in my opinion, and based on my analysis, of 50% on your money – and quite possibly more.

As the American economy muscles its way out of the pandemic morass, this is one of the ultimate stocks to buy and profit from as you go along for the bullish ride.

And I’ll tell you all you need to know right here.

Big Gains, Low Risk

Back when I made my bank-stock prediction to Charles Payne, there was one that I loved and that I recommended to my subscribers.

It’s still my favorite.

I’m talking about Wells Fargo & Co. (NYSE:WFC).

Take this to the bank: If this plays out as I expect, WFC is a stock that will give you 50 cents in profits for every $1 invested.

That’s right, a 50% gain – with very little downside risk.

Wells Fargo had been the laggard in the big bank space – and for good reason. Their sales and “cross-selling” scandals destroyed confidence in the bank’s management. And as the country shut down and cyclicals tanked, Wells Fargo plumbed new lower lows.

As investors dove into stocks – eventually bidding up cyclicals, including some banks – Wells floundered and was left behind. Some say deservedly so. But not me.

That’s when I started recommending it.

As the cheapest big bank in the country, it was a stone-cold bargain.

And it still is.

I have good reasons for making Wells Fargo a “Buy.” Here in the low-$40s. The company is finally putting its legacy scandals behind it, has set aside ample reserves for litigation and regulatory hits, has reshuffled top management, and is close to having the U.S. Federal Reserve lift its punitive asset-growth restrictions.

And let’s not forget the bank’s earnings.

Wells Fargo reported its first-quarter earnings yesterday. The consensus estimate was for earnings per share (EPS) of 67 cents – a huge rebound from the year-ago profits of a penny a share.

But the big once-laggard bank blew that estimate out of the water. EPS came in at a whopping $1.05, 105 times the EPS of a year ago. Revenue estimates were for a lofty take of $17.5 billion. Wells took in $500 million more in revenue, posting a strong run-up to $18.06 billion in quarterly revenue

And, to prove it’s putting its legacy mistakes behind it, the bank garnered a net benefit of $1.05 billion by releasing reserves it had set aside.

That’s the kind of earnings “beat” and the kind of numbers that will push the stock percentage points higher. In fact, by midday yesterday WFC was up more than 5%.

That’s what happens to cyclicals that grow their earnings in the early stages of an economic recovery.

As interest rates rise, Wells’ net-interest margin (NIM) will increase, as well. NIM is what a bank makes on loans – also known as the “spread.” Rates will continue to rise into the second and third quarters, and maybe move a lot higher in Q4. And so will Wells’ net interest margins and profits.

That’s what you should be looking for in a cyclical stock – a company that can boost earnings as the economy bounces back.

Find that and you’ve also found a company whose shares will surge, too.

Find that before everyone else, and you’ll really cash in.

Over the past week, I’ve been zeroing in on several of those opportunities and I’ve found that Well’s isn’t the only company ready to pop…

Remember, back in January, when I covered GameStop and the retail trading revolution? Back then, I told you that retail traders had become the tail wagging the dog – Wall Street pros – and I stand by that assessment.

GameStop may not be in the crosshairs of retail traders today, but surges just like it are happening time and again – right under the noses of Wall Street pros. I’m talking $11.2 million up for grabs every second of every day.

That’s a fantastic amount of money ripe for the taking, so let’s take it.

My colleague has devised a triple-tier software that spots tradeable surges – some with upsides of 2,500% in just 16 days – before they happen.

As I said, find the surge before everyone else and… Well, you could be making money until the cows come home.

You’re first surge play is on the horizon, but this opportunity is time-sensitive… And the clock is ticking. Click here to see how to unleash your very first surge strike!

Till next time,

Shah