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Non-Tech : WELLS FARGO

WFC 83.15

+0.9%

Nov 21 9:30 AM EST

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To: Barron Von Hymen who wrote (1011)	12/9/1997 9:16:00 PM
From: Mark Halfon	Read Replies (1) of 1281

If you use cash EPS WFC trades at a P/E of 21, not the 31 we see in the paper! (previous four quarters EPS $10.49, cash EPS of $15.65, stock price $335) This is close to the 19 P/E that Bank of America trades at now. The bank merger mania combined with the Bloomberg quote from the CEO are keeping the stock up, but what caught my attention was the open interest of 869 contracts in the July 98 320 calls. These are by far the largest positions in WFC options (86,900 shares worth). Makes me think that something is likely to happen before July 1998! The likely suitor is NationsBank. I figure that would make NB the number two bank, right behind Chase Manhattan. it also gives NB a strong position in the west. The kicker is that some of the WFC premium would likely rub off on NB stock so they can afford to pay some outrageous price! I'll post more figures when I run some basic calculations but these are my first thoughts....

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