NEW YORK ( TheStreet) -- While Citigroup ( C) investors pushed the shares down 5% to $4.86 in afternoon trading following a disappointing earnings release, the market reaction was simply another opportunity for investors to take advantage of a stock that is priced cheaply to forward earnings, giving the smart money a chance to make a long-term killing.

While it's too early to know what effect Tuesday's earnings release will have on analysts' estimates, at Friday's market close Citigroup was trading at a low 9.3 times the consensus 2012 earnings estimate of 55 cents a share among analysts polled by Thomson Reuters.

According to data supplied by SNL Financial for the 21 U.S. bank holding companies with market capitalization of at least $5 billion, only three had lower forward P/E's than Citigroup: Wells Fargo's ( WFC) forward P/E based on Friday's closing price of $32.75 the 2012 consensus earnings estimate of $3.59 a share was 9.1, JPMorgan's ( JPM) was 8.4 based on a closing price of $44.91 and 2012 earnings estimate of $5.35 a share and Bank of America ( BAC) had the lowest forward P/E of 7.5, based on Friday's close at $15.25 and the 2012 consensus earnings estimate of $2.02 a share.

The most expensive among the large-cap banking group were Peoples United Financial ( PBCT), with shares closing at $14.42 Friday, or 19.2 times the 2012 consensus earnings estimate of 75 cents a share and Comerica ( CMA), whose shares closed at $42.25 Friday, or 14.6 times the 2012 earnings estimate of $2.90 a share.

Comerica was down 8% Tuesday afternoon to $38.67 following the company's announcement of a deal to acquire Sterling Financial ( SBIB) and a fourth-quarter earnings beat with a large release of loan loss reserves.

While it is a little early to be looking out further -- especially with continued uncertainty regarding legal reserves to be set aside for mortgage buybacks and all the coming regulatory battles as various provisions of the Dodd-Frank Wall Street Reform and Consumer Protection Act are implemented -- this uncertainty and the slow economic recovery have elongated the period in which long-term investors and build up their investments, adding on dips, for a big payoff a couple of years down the road.

For the Big Four, the consensus is for earnings to increase at least 9% in 2013 from 2012.

Citigroup's investors may have been disappointed when CEO Vikram Pandit indicated that the company would wait until 2012 to begin returning capital to investors through buybacks or an increased dividend, "of course based on our discussions with our regulators." However, Richard Staite of Atlantic Equities said after the earnings release that Citi's Tier 1 common capital ratio of 10.7% after earning $10.6 billion during 2010 was "well above the 9.8% reported by JPM," and that the company was "in a strong capital position."

CFO John Gerspach said during Citi's conference call that the company was "confident, based on what we know today, that we will be well above the Basel III capital requirements."

Saite has an "overweight," or buy rating, on Citigroup and said there were "plenty of positives" in the company's fourth-quarter results, including a "rapid improvement in credit quality with nonperforming loans down 13% quarter-to-quarter. His target price for Citigroup is $6, which would be a 23% gain for investors.

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-- Written by Philip van Doorn in Jupiter, Fla.

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Philip W. van Doorn is a member of TheStreet's banking and finance team, commenting on industry and regulatory trends. He previously served as the senior analyst for TheStreet.com Ratings, responsible for assigning financial strength ratings to banks and savings and loan institutions. Mr. van Doorn previously served as a loan operations officer at Riverside National Bank in Fort Pierce, Fla., and as a credit analyst at the Federal Home Loan Bank of New York, where he monitored banks in New York, New Jersey and Puerto Rico. Mr. van Doorn has additional experience in the mutual fund and computer software industries. He holds a bachelor of science in business administration from Long Island University.

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