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Financial Winners & Losers: Citi, Goldman

A securities firm takes a bearish turn on Goldman Sachs on Thursday -- although, overall, it is a quiet day for the shares of the major U.S. financials.



) -- 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,


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


(BCS) - Get Barclays Plc Report

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


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,

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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) - Get Goldman Sachs Group, Inc. Report



(JPM) - Get JPMorgan Chase & Co. Report

, but Woodland Hills, Calif-based

Zenith National Insurance



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.

There were 24 million shares of Zenith traded by Thursday afternoon, versus an average daily volume of 242,000 shares. This Zenith trading volume was higher than trading in many of the big U.S. financial stocks on Thursday.

The rise in Zenith shares on Thursday was met by legal resistance, as the law firm of Levi & Kosinsky announced right after the acquisition that it was investigating the board of directors of Zenith for suspected breach of fiduciary duty for not pursuing the best potential acquisition price.

Far away from Woodland Hills, California, among Wall Streets big boys, Goldman Sachs received a bearish call from Macquarie Securities on Thursday. Goldman was down more than 1% on Thursday, or a loss of $1.73 to a share price of $155.55 in the mid-afternoon.

A Macquarie research note included a major change in the securities firm's view of Goldman's first quarter - Macquarie now expects revenues to increase 1%, versus a prior estimate of 16% revenue growth. Goldman's Investment banking, in particular, will fall 27%, according to Macquarie's estimate. The bearish outlook by Macquarie brings its estimate of $3.10 earnings per Goldman Sachs share in the first quarter to the lowest of all street calls.

Morgan Stanley was also down on Thursday, by 0.8% or 23 cents, to a share price of $27.16.

JP Morgan was up slightly, with a gain of 26 cents in the mid-afternoon on Thursday, to $40.31.

The financial sector was up less than 0.3% on Thursday afternoon, and trading volumes reflected the relative disinterest in financial shares after a few days of significant action.

The financial press was busy fighting over which famed investor made the right decision in the fourth quarter: John Paulson for buying

SunTrust Banks

(STI) - Get SunTrust Banks, Inc. Report

shares, or Warren Buffett for selling SunTrust shares. Maybe George Soros, John Paulson and Warren Buffett need to release their holdings on a weekly basis.

JPMorgan was at less than half of its average daily volume in the mid-afternoon on Thursday, as was Goldman Sachs, and


(AIG) - Get American International Group, Inc. Report

. Morgan Stanley was trading at a level one-third its average volume on Thursday.

Bank of America was the real standout among U.S. financials on Thursday, even though it also was trading at half its average daily volume in the mid-afternoon. Bank of America was up 1.5%, or 23 cents to $15.89 on Thursday afternoon.

The biggest Bank of America news on the day was that

The New York Times

reported that there may be a decision by Monday on the bank's $150 million settlement offer in a case - concerning Merrill Lynch losses and bonuses-- brought by the Securities and Exchange Commission.

Wells Fargo, which received yet another vote of confidence from Warren Buffett and

Berkshire Hathaway

(BRK.B) - Get Berkshire Hathaway Inc. Class B Report

late on Tuesday when it was revealed that the grandfather of the markets had again upped his stake in Wells Fargo, was flat on Thursday afternoon, reflecting the financial sector's Thursday mode of enervation.

-- Reported by Eric Rosenbaum in New York.


>>Soros Matches Paulson's Bet on Citi

>>Soros, Paulson Buy Citi: Should You?

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