Cramer's 'Mad Money' Recap: Why Citigroup Is a Buy (Final)

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NEW YORK ( TheStreet) -- Looking for a stock that'll both pad your wallet and help reduce the federal deficit at the same time?

Jim Cramer told the viewers of his "Mad Money" TV show Thursday the stock they need to own is the once hated Citigroup ( C). He gave five reasons why investors need buy into the stock.

1. It's cheap. Cramer said while it may be hard to value Citigroup's assets or earnings potential, he values the $4 stock at 1.5 times its book value, making it worth at least $6 a share.

2. The government is ready to trade. Cramer said the government is set to trade its $5 billion stake in the company on Sept. 10. If Citi were to hit $6 a share by then, the government would make a $20 billion profit on that investment.

3. Citi is a global franchise. Cramer said Citigroup is a play on a global recovery, as it operates in 140 countries around the globe.

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4. Citi is unloading its bad loans. Cramer said after months of struggling, Citi is finally able to unload tons of bad loans that have been crippling its balance sheet.

5. Citi's mangement is stable. Cramer said that he fully supports Citi's management, and believes they can complete the turnaround already in progress.

Why is Citi trading so low in the first place? Cramer said the government's stake in the company diluted the shares substantially, and investors are still skittish about mortgage and credit card risks. Cramer said there's also FDIC chairman Sheila Bair, who's been extremely vocal against the company's progress, to contend with.

But Cramer said the company's global outlook outweighs these risks, and he sees Citi hitting $12 a share, albeit not as fast as rival Bank Of America ( BAC), a stock which Cramer owns for his charitable trust, Action Alerts PLUS , which is more levered to a recovery in housing.

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