Reviewing past posts (3/10) here on Citigroup. Stock is now back to about where it was at that time:
finance.yahoo.com;
Stock remains a black box to me. Several of the same analysts are still bullish.
This time, assuming down market tomorrow (Dow futures are down 211) and assuming I can buy C at about $31, I'll buy the black box and questionable management and take on a few C shares. Maybe also JPM.
SI shows C has stated bv of $58.45/sh and tangible bv at $45.34
Some margin of safety with that. ... I hope.
I note C is, or was, one of Fairholme Fund's top ten holdings, fwiw.
Dick Bove likes C as well:
finance.yahoo.com
TWST: Who do you like best in the money center category and why?
Mr. Bove: The money center banks are not providing the type of operating earnings improvements that investors want. They want to see operating earnings, exclusive of loan loss reductions, improving. This is not likely for these companies near term. What is evident is that these banks are selling below their liquidation values in many cases.
Citigroup © just screams at you, and it is my favorite stock by far. I cannot see why a bank should sell at a discount to its net cash value, because as I say its tangible book and its stated book value is 100% cash. If a bank is selling at a discount to its net cash value, it strikes me that ultimately it's going to get up to its net cash value if nothing else.
However, I think Citigroup has also got one of the better business models in the industry. When John Reed was running the bank, he had dual theory. He realized that the rest of the world was going to catch up to the United States economically, and therefore, he wanted to be positioned to sell consumer finance products to the rest of the world. Number two, he wanted to have the leading position in banking technology in order to be the lowest-cost producer in the industry.
Sandy Weill, ex-CEO, threw those theories out of the window. He also threw the bank out of the window because it was bankrupt by 2008.
However, Vikram Pandit, current CEO, has put John Reed's concepts back in place. They are the right concepts. This means that Citigroup is positioned better, literally, than any other bank in the world.
There is no other bank in the world, not HSBC (HBC), not Banco Santander (STD), not Barclays (BCS) or you name it. There is no other bank in the world which is in as many countries as Citigroup is, doing business with as many people in those countries as Citigroup does, with as many corporate clients that are totally reliant on Citigroup. So if Citigroup sticks with Reed's core philosophy, which is to do business with the growing affluent around the world and do it with the best technology in banking in the world, then Citigroup will be unstoppable. It will be unstoppable with the best balance sheet in banking...
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C though doesn't seem to me to be selling at what Mr. Bove says is a discount to its net cash value.
finance.yahoo.com
$783B -$703B = $80B. Divided by 2.92B sh out. = $27.4/sh. Still, I like Mr. Bove's enthusiasm for the stock. |
