Strongest Troubled Stock: Citi Tops Poll
(Updated with current share prices and additional news related to the companies in the poll.)
NEW YORK (
) -- According to users of TheStreet,
Citigroup
(C) - Get Report
is the best of the worst, ranking the safest play among what many consider the most troubled stocks around these days.
Troubled companies -- those either partially owned by the government or in danger of failing -- have, of course, been a hot topic on Wall Street. And there was a plethora of news surrounding Citi this week, as it easily topped TheStreet's poll (Question: "Which troubled stock do you consider to be the smartest buy?") with a whopping 65.7% of the vote.
At the forefront was chatter surrounding the government's 30% stake in the company. Citi announced that it plans to pay back $20 billion it owes the government when the bank sees more concrete signs of recovery. A timeframe for the move was not announced.
Jim Cramer, it's worth noting, says that until the government decides when it plans to sell off this stake, the short trade is obscured.
Re-Examined Citi Trade
Citi also continued to deal with the
headache in the sum of $100 million
. That's the controversial paycheck of Andrew Hall, the head of the company's oil trading unit Phibro.
Citi' chief executive Vikram Pandit said Thursday evening that the company is considering spinning off the unit.
Pandit's opposition to this hefty paycheck could
pose a problem for AIG and other companies that accepted federal bailouts
, opening the discussion of how much is too much.
Vikram also said the company will eventually
sell its remaining stake in the Smith Barney
joint venture entered into this summer with
Morgan Stanley
(MS) - Get Report
.
Citi has been trying to divest troubled assets, but isn't having much luck.
But even as it ranked among the hottest stock this week, shares fell 7.6% to close on Friday at $4.26. In early morning trading Monday, it was changing hands at $4.37, up 11 cents on the day.
Financial lender
CIT
(CIT) - Get Report
ranked second, though it came in substantially lower than Citi, with 15% of the vote.
American International Group
(AIG) - Get Report
seized 9.1% of the vote to rank third.
Both CIT and AIG were cause for concern this week due to
woes in the aircraft leasing sector
. According to the
Wall Street Journal
, their aircraft leasing units need strong credit ratings to enable them to raise money cheaply so they can buy aircrafts and lend them out at higher rates -- something neither company has as they seek sales of their units.
Fannie Mae
(FNM)
and
Freddie Mac
(FRE)
placed fourth and fifth, respectively, indicating the relative lack of faith being placed in them by the investors.
On Monday morning, Fannie Mae announced that it plans to sell $1 billion of three-month benchmark bills due Dec. 23, 2009, and $1 billion of six-month bills due March 24, 2010, on Wednesday in a Dutch auction. Shares of both companies were trading in the narrow range they have occupied for the past few weeks -- Fannie Mae trading flat at $1.60, up 2 cents from Friday's close, with Freddie Mac holding steady at $1.91, up 4 cents.
-- Reported by Jeanine Poggi in New York
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