Financial Winners & Losers: Citi, Goldman

NEW YORK (TheStreet) -- The financial sector was trading close to flat on Thursday, and the action among the big U.S. financials was mixed -- and not significantly higher or lower on either end of the trading -- after what had been more bullish trading sessions on Tuesday and Wednesday.

By Wednesday, Citigroup shares had received a boost after it was revealed in quarterly filings that famed hedge fund managers George Soros and John Paulson had both made big bets on Citi shares -- in Soros' case it was a new position. The week had gotten off to a strong start among financial shares -- at least those not tied to Greece's economy -- after Barclays(BCS) blew by earning expectations.

Hedge fund favorite Citi was up more than 1% on Thursday afternoon, or 3 cents to $3.44, but it was trading at relatively low volumes. There was a report from Reuters on Thursday that Citi had hit a roadblock in its planned sale of its real estate management arm, Citi Property Investors, with important investors who fear that the management team of the real estate business will be destroyed as part of the sale.

Citigroup is also facing a challenge over alleged misrepresentations in the sale of more than $115 million in derivatives to seven Norwegian municipalities in 2007, as a U.S. judge ruled late on Wednesday that the case was allowed to continue, Dow Jones reported.

A good sign of how muted the trading was in U.S. financials was the financial stock that was far and away the winner in the financial sector on Thursday: not Citi, not Barclays, not Goldman Sachs (GS) or JPMorgan(JPM), but Woodland Hills, Calif-based Zenith National Insurance(ZNT).

Zenith shares reached a zenith on Thursday, attaining a 52-week high of $37.80, or a one-day gain of $8.84, after Fairfax Financial Holdings decided to acquire all of the outstanding shares of Zenith common stock which it does not currently own. Zenith stockholders will receive $38.00 per share in cash, in a deal that represents a premium of 34.5% to Zenith's book value as of December 31, 2009. The Fairfax Financial acquisition values Zenith at approximately $1.4 billion.