A universally despised industry, the big banks are considered by many stock analysts and pundits to be uninvestable. Given what the banks have been through in the past 4 years – and as the results of yet another stress-test are released – who can blame them? To be sure, the housing market is still terrible, and unemployment is still over 8%. Just about the only market sector that looks worse off are the homebuilders themselves.

So, is there any bank out there that looks like it may be simply guilty by association, and worth a look as an investment? I believe there is. Wells Fargo (WFC) was never one of those truly troubled banking institutions with really “toxic” assets. The money received through the government’s taxpayer-funded bailout was largely forced upon them. It can be argued that Wells Fargo would have been just fine without that money, thank you very much.

To be clear, the banks have moved up quite a bit since the October 2011 market lows, and have recovered most of the losses since 2008. Wells Fargo is one of the better performers, with its stock price near a 52-week high at around $34 a share. So, what makes me believe that this out-performance can continue? There are a number of reasons to be optimistic, which I will lay out for you here.

Justified Optimism

First off, the banks’ capitalization as a ratio to loans has improved dramatically over the past few years.To continue reading, click here.