Citigroup Stock Increasing For 2014, Key Information Before The Annual Report

| About: Citigroup Inc. (C)

Citigroup Inc (NYSE: C) had an excellent 2013 with a stock appreciation of 27% (opened on January 2, 2013, at $40.91, and closed at $52.11 on December 31, 2013). Although the dividend paid only $0.01 per quarter most investors should be happy with the stock appreciation. Investors should expect a different 2014, and most of it will be very good for their portfolios.

Shares of Citigroup are among the cheapest for any bank relative to forward earnings estimates. The stock is trading for 9.1 times the consensus 2014 EPS estimate of $5.31. Citigroup is fairly valued at $52 or 9.7x consensus estimates for 2014 because those consensus earnings would equate to roughly a 9.7%, a return on tangible common equity. Citigroup's stock price to book value is trailing with today's open (January, 2014) at $54.81 and the book price of $64.49 the ratio is 0.85. The ratio was lower (near 0.60) in 2012, as Citigroup was recovering from the financial disaster, however, its growth and bottom line has not only improved the stock price and financial outlook, Citigroup impressed the financial markets with best-in-show during the 2013 Basel III reports.

CEO Michael Corbat has maintained the position of selling off Citi Holdings, but only through profitable methods. This has reduced the Citi Holdings to $122 billion in assets as of September 30, 2013, and representing just 6% of Citigroup's total assets, and declining 29% from end-of year 2012, and 59% from 2011. The patience and process has produced excellent results for the company, although many bashed the leadership early, now the respect for the process has grown across the financial markets.

Several analysts are calling for Citigroup's earning report between $0.92 per share, and $1.06. Citigroup will report earnings ahead of the bell on January 16, 2014. Citigroup may be able to utilize a sizable portion of the deferred tax assets (DTAS) at year's end. This was accumulated during the recession and tax losses it carried over and now is expected to use nearly $60-65 billion that will reduce taxes and boost the after tax numbers.

Early in 2014, we can expect 4 major impacts on the market place and Citigroup. First is the new Federal Reserve Chairwoman, Janet Yellen. Second is the new leadership at the Federal Housing Finance Agency (FHFA). Third is the 2013, Financial Annual Report, and fourth is the Basel III results. Each will have impact on Citigroup in 2014.

Janet Yellen has been confirmed as the Chair of the Federal Reserve. There is little stress in the market from the change of leadership in this vital position that controls the monetary policy, as the market assesses her methodology very similar to out-going Bernanke. Very little is expected to change as the Feds believe the market and economy are headed in a positive direction.

The markets are a little more uneasy with former Rep Mel Watt, who will be sworn in as the head of the Federal Housing Finance Agency (FHFA). The FHFA is the conservatorship of Fannie Mae (OTCQB:FNMA) and Freddie Mac (OTCQB:FMCC). Comments prior to him taking the reins have been focused on delaying several actions that would raise guarantee fees. His tenure will be defined by the direction Fannie and Freddie take during the next several years that will determine if Fannie and Freddie will shut down, revert to ownership of shareholders or another direction yet undefined. This will have an effect on the mortgage market and how banks and mortgage companies do business.

Citigroup will issue its fourth quarter results via press release at approximately 8 a.m. (NYSE:ET) on Thursday, January 16, 2014. At 11 a.m. , results will be reviewed via live webcast and teleconference. The press release, webcast and presentation materials will be available here. To dial-in to the live teleconference, please call (866) 516-9582 (for U.S. and Canada callers) or (973) 409-9210 (for international callers). Conference ID: 20360488.

Our expectation of Citigroup's stock price appreciation target for 2014 is near $64. That is about a 20% increase and with a dividend of $0.05 to $0.10 per share would increase the return and make stockholders very satisfied. With nearly 3 billion shares outstanding, $0.05 per share would cost the company $150 million dollars per quarter. Citigroup has the cash reserves to cover this cost, but a large percentage is held to cover the Basel III requirements.

During the Financial Inclusion 2020 Global Forum, Michael Corbat presented the Keynote Speech, in London, England, on October 28, 2013. His focus was on the future and the three dominant secular trends which Citigroup has positioned its business: Globalization, Urbanization and Digitization. Citigroup believes financial inclusion is a goal that will break barriers and provide more for less for our global economy.

The presentation was artfully crafted, but the level of detail significant. Mr. Corbat displayed the conceptual knowledge of a dynamic, changing world, from remote and third-world countries to high-tech industrialized nations, with budding technology dispersed, and highly digitized capabilities reaching the across all boundaries of politics, land, space, wealth and time. Citigroup's leadership across the world provides opportunities for its customers (present and future) and its core business operations.

Citigroup will continue to prosper throughout 2014 by stock appreciation and increase their dividend this year. Citi Holdings will also continue to sell off assets, and the profit margin for Citigroup will display a more profitable picture due to world growth outside of the U.S.

Disclosure: I am long C. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.