Stocks Under $10: Avoid Citigroup

Cheap financial stocks rallying huge. How can you make money?

Frank Curzio is the portfolio manager of Stocks Under $10 and shows you how to profit off of fear and forced selling. Watch his video on whether or not to buy Citigroup ( C) after its 38% rally Tuesday.

Biggest news of the week.

Citigroup's CEO, Vikram Pandit, announced the bank made a profit in the first two months of 2009. On the news, the market rallied huge and Citi alone traded 1.1 billion shares. Some analysts remain skeptical over the bank's ability to maintain a profit.

General Electric ( GE) finally lost its beloved "AAA' credit rating. The S&P downgraded GE to "AA+' just two weeks after the conglomerate trimmed its dividend. The company did say that GE's outlook was stable and the stock saw a relief rally.

General Motors ( GM) also saw a pop in shares. The struggling car company announced it could survive the short term without $2 billion emergency loans. GM may still need $16.6 billion in federal loans but cost cutting measures during the first quarter helped its cash flow. Also, competitor, Ford ( F), altered its contract with the UAW which will save the company $500 million annually. GM is trying to fix its own contracts and Ford gave GM a model to follow.

IMAX ( IMAX) reported earnings this week below analysts' expectations. Management expects the company to turn a profit in 2009 helped by some big name releases like 'Harry Potter and the Half-Blood Prince.' IMAX has $27 million in capital and a good operating cash flow. Frank Curzio owns this stock for his model portfolio. See how he's trading it! Email Frank@thestreet.com for a free trial now!

The week ahead.

The focus continues with financials under $10. Have we seen the bottom? Investors will look to Congress for any details on the mark to market accounting rule, a potential catalyst for banks stocks. Officials met Thursday morning, fueling a market rally for a third day. No specifics have been given yet but the tone was optimistic. Investors are hoping to see short term modifications.

Tune in to the Real Story Podcast where Frank takes you beyond the headlines to tell you what's really going on in the market.

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This week on the podcast Stephanie Link, Director of Research for Cramer's Action Alerts Plus Portfolio, made another great call: buy GE. Stock rallied over 13% on its credit rating cut and is sharply above its low price of $5.72. Link says the industrial division alone is worth $11/12 a share. Its dividend cut and CFO's financial disclosure have also helped improve its transparency problems plaguing its GE Capital group.

Frank's advice for the week: pay attention to when debt is due. If a company has a lot of debt but it isn't due for another 5 years, this could present a buying opportunity. The markets are pushing down stocks with debt on their balance sheet but if there are no short term liquidity concerns, you can make some money.

Frank and his guests make great calls all the time and you need all the help you can get in this volatile market so don't miss his podcast. Click now!

This is an historic opportunity to invest in beaten up but well-capitalized names. Make fear and forced selling your friend. Email frank@thestreet.com for a free trial now.

Alix joined TheStreet.com TV in February 2007. Previously, she held positions in film and theater production, management, and legal administration. Alix has a degree in communications and theater from Northwestern University.

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