Top 10 'Buy'-Rated Stocks Under $5

1. Citigroup(C)

Company Profile: Citigroup is a financial-services holding company, whose businesses provide consumers, corporations, governments and institutions with a broad range of financial products and services, including consumer banking and credit cards.

Share Price: $3.84 (Sept. 8)

2010 Stock Performance: 16%

Analyst Consensus: Citigroup garners the most "buy" ratings, with 13 of the 25 analysts covering the stock recommending that investors increase stakes in the company. Another nine analysts have "hold" ratings on Citigroup, while three researchers suggest that investors dump the shares. The average of 15 recent stock-price targets is $5.37, which is 40% above where the stock currently trades.

Bullish Case: Bank of America/Merrill Lynch analyst Guy Moszkowski wrote in a July 19 research note that Citigroup is continuing to invest for growth. "With its new capital base, significant reserve levels and improving business and customer discipline, [Citigroup] should be able to survive even a severe loss scenario and still maintain acceptable capital ratios while recovering significant long-term earnings power," Moszkowski wrote.

-- Written by Robert Holmes in Boston.

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