I closed out Citigroup.
Too tough for me.
The stock has a lot of positives - powerhouse, geographical diversity, possible outside stockholder pressure to improve, rising dividend every year. My file folder has clippings from noted value investors who are or were in the stock and recommending it as a value pick: Neff in every recent Barron's roundtable report; a couple of recent Dow Theory Forecasts recommendations as "Good Value"; Muhlenkamp in his fund, an old Torray recommendation; Barron' 3/3/06 cover story "CEO Chuck Prince's growth strategy may be about to pay off".
I'm not exactly sure where I am with this stock: it's up from my buys, and I did collect those dividends, but there's the time value of money to consider here too. Looking back over the past three to five years.
It's related to my previous post on how long does one keep a losing or unsatisfactory position? With my last batch of C, it's been three years, and to me, I could almost call Citigroup a value trap. Here's a comparison of C to CIT, for example:
finance.yahoo.com
Really not much movement in stock in C past four years even ignoring the recent drop.
One thing C has done which I don't like is that they've taken some of the loans that they might have sold but could not have in the current market onto their books. Not a great deal of money relatively (Can't find the p.r. now. I believe amount was around $600M.), but I don't like the idea: "we can't sell it; we'll not write it off or write it to market (whatever that might be), we'll just keep it on our books." Like the Japanese banks did with their loans in the '90's. Maybe with the same consequences. Who knows how many other loans C has that will be treated this way.
Anyway, for me with C, I'm at the price and time point where I say, there's got to be better places for me to keep my money. |
