Each week, Industry Focus: Financials host Jason Moser and Fool.com contributor Matt Frankel, CFP, discuss the stocks that they're watching. In this segment, Moser has his eye on tech heavyweight Apple (NASDAQ:AAPL) as the company aggressively expands its service offerings, and Frankel is watching Wells Fargo (NYSE:WFC), because he thinks CEO Tim Sloan's recent departure is more of a positive catalyst than the market is giving the company credit for.
A full transcript follows the video.
This video was recorded on April 1, 2019.
Jason Moser: Let's go ahead and wrap things up here. Before we do, we want to give our listeners one to watch. Matt, I'll let you kick it off this week. What's your one to watch?
Matt Frankel: I'm actually going to go with Wells, just because I don't think that the market truly appreciates what a big deal it would be if that Fed penalty was lifted and if someone else was in there to get the lawmakers off the bank's back. Wells Fargo popped a little bit after the news was announced, but not by much. It's still a major underperformer, even over the past week or so, in the sector. I want to go with that. I think there's a lot of upside there if they successfully find a new CEO and get the penalty lifted.
Moser: Yeah, that's probably a pretty good catalyst there. We always look for, in investment ideas, either big market opportunities or some kind of catalyst that'll help unlock value. I think that probably makes for a pretty good catalyst. It has to happen eventually, you figure. That's a good call. I like that!
Matt, did you catch any of the Apple event last week?
Frankel: I did. I wrote a piece about the card and the details of it for our sister site, The Ascent.
Moser: Were you as underwhelmed by the performance as I was?
Frankel: I was. My take on it is, it's not a game-changing product by any means, but Apple faithfuls will still sign up. That's about it.
Moser: Yeah. That's what I'm going with this week for my one to watch, is Apple. We've said it before, Apple pivoting to being more of a services business, or at least trying to grow that services side of the business, makes a lot of sense. I like the fact that they're doing it, and I think they're doing it the right way. They're going to be getting a lot of little contributions from a lot of different efforts. On the one hand, the Apple Card seems kind of interesting from the perspective of the security idea. They do offer some rewards for card holders. Cards, to me, generally speaking, it really boils down to incentives. As far as incentives, what is your card going to give you? And I don't think anything really stood out in regard to the Apple Card. I look at my Amazon Prime Visa, and given I use Amazon a whole heck of a lot more than I use Apple, that card gives me way more than an Apple card ever would. But, yeah, there are going to be some Apple faithful that get it and like it. They're always going to swear by it.
The thing that struck me, and I don't know that we talk about this as much here domestically, but overseas, certainly, it seems like contactless payments are far more popular than they are here. I'm talking about a card that you just scan. Instead of swiping it or using your phone, you just have a card that you just swipe over the top of a sensor, and it just get the data from that. Personally, I like contactless payments more than having to pull my phone out to do a payment with my phone anyway, which makes me wonder about the Apple card. I don't know that mobile payments are as strong globally as maybe they might be domestically here. But I don't know. Apple Card, I'm a little bit on the fence. I think I'm going to have to dig a little bit more into it. It could be a contributor. But, honestly, I like the fact that they're using Mastercard. I own those shares. If Mastercard's making some money from it, then I'm happy. We'll dig into more of that and learn more about how that contributes to the business here in the coming quarters as well.