5. Citigroup (C) is a diversified financial-services company, with retail-, commercial- and investment-banking units. The company was on the brink of bankruptcy two years ago, weighed down by subprime mortgage investments gone bad. Citigroup's stock traded for less than $1 in early 2009.
Citigroup swung to an adjusted fourth-quarter profit of four cents from a year-earlier loss, but missed analysts' consensus target by 48%, sending shares down more than 6% in reaction. Citigroup's sales figure missed consensus by 6.4%. Still, its stock, among the heaviest-traded in the market, receives positive reviews from researchers, with 16, or 53%, "buy" recommendations, nine "hold" ratings and three "sell" rankings. It is up 52% in 12 months.
Goldman's $5.50 target suggests a one-year potential rise of 13%. Dick Bove, at Rochdale Securities, remains the stock's greatest advocate, forecasting an advance of 42% to $6.96. Citi's stock is still cheap relative to financial-services peers, costing 8.7-times forward earnings, 0.9-times book value and 1.3-times sales. Those figures reflect discounts of 25%, 10% and 31% discounts to industry averages. Citigroup has reformed its risk profile markedly since the recession. Its Tier I common ratio widened to nearly 12% in the latest quarter and leverage fell to 12:1.Goldman, dismayed by lower capital-markets revenue during the quarter, is encouraged by Citi's asset sales, strengthening balance sheet and emerging markets exposure. Citi Holdings is shedding assets faster than anticipated, which is bolstering liquidity. Investment-banking revenue increased 25% during the quarter.
Select the service that is right for you!COMPARE ALL SERVICES
Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.
- $2.5+ million portfolio
- Large-cap and dividend focus
- Intraday trade alerts from Cramer
- Weekly roundups
Access the tool that DOMINATES the Russell 2000 and the S&P 500.
- Buy, hold, or sell recommendations for over 4,300 stocks
- Unlimited research reports on your favorite stocks
- A custom stock screener
- Upgrade/downgrade alerts
Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.
- Diversified model portfolio of dividend stocks
- Alerts when market news affect the portfolio
- Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.
- Real Money + Doug Kass Plus 15 more Wall Street Pros
- Intraday commentary & news
- Ultra-actionable trading ideas
Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.
- 100+ monthly options trading ideas
- Actionable options commentary & news
- Real-time trading community
- Options TV