Motley Fool analyst Anand Chokkavelu is buying Wells Fargo in his real-money portfolio. Here's his logic.

Wells Fargo is a sound bank, with continued room to grow on the operational side, plus the possibility of multiple expansion. Scooping up Wachovia was a smart move, making it a lot stronger, and adding to its asset base, and it's been scooping up lots of mortgage market share, as well.

Another factor is upside. It's easy to say that many banks have great upside, but the challenge is actually realizing that upside, and Wells Fargo has a higher chance of executing on that than many of its peers.

The stock is expensive on a relative basis, trading at 1.3 times book value (or 1.7 times tangible book value), but over the past 10 years, it's often been double the current multiples.

Final piece of evidence that Wells Fargo is a buy: Warren Buffett has been buying up shares lately, as well.

 

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