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"So you see, Good and Evil have the same face; it all depends on when they cross the path of each individual human being." - Paulo Coelho, The Devil and Miss Prym

Noted hedge fund manager and liberal gadfly made some big bets on a couple of major U.S. Banks according to 13F filings for year end. Soros Fund Management purchased new stakes in both JP Morgan (NYSE:JPM) and Citigroup (NYSE:C). The fund now has 2.8mm shares in JP Morgan and 2.3mm shares in Citigroup.

Although I disagree with most of Mr. Soros' political leanings and advocacy, it is hard not to admire his decades of impressive investing success. I also think both of these new stakes in major banks will be profitable as both look undervalued here on a long term perspective.

The stock of Citigroup is offering a nice entry point after declining ~10% from its highs late last year. The main driver of the recent pullback is Citi's exposure to emerging markets. The banks gets just over 40% of its revenues and earnings from emerging markets - by far the most of any major U.S. bank.

While the turmoil in key emerging markets (Turkey, Argentina, Brazil, India, etc. ...) is definitely a headwind currently. However, long term this exposure is likely to reward patient investors as growth in the emerging markets will be higher than the developed world over the next decade. BAML came out earlier this month saying the sell-off is overdone. The BAML analyst has a $65 a price target on the shares.

Citigroup is the only major American bank selling at less than tangible book value. Earnings are projected to grow in the 10% to 15% range in both FY2014 and FY2015. I would also look for the bank to get permission to pay a significant dividend again by the end of the year. This could happen after "stress tests" are completed in the first half of the year. Stock is fairly cheap at ~10x this year's expected earnings and ~8.5x next.

JP Morgan is attractively valued for long term investors even if it is currently a "pinata" for a variety of state and federal regulatory agencies. It is working through these litigation concerns, most of which are the result of its acquisition of Washington Mutual and Bear Stearns during the financial crisis. The bank should put the vast majority of the concerns behind it by the end of 2014.

Based on FY2015's projected earnings, JP Morgan is the cheapest of the major money center banks. Morgan Stanley is also high on the bank shares ahead of the company's Analyst Day next week. Unlike Citigroup, JP Morgan always pays a decent dividend yield (2.6%) and I would look for this to increase nicely in coming years and litigation woes ebb. The bank should be a nice 2014 story as earnings should gain more than 35% year-over-year to ~$6 a share.

It appears George Soros has made some shrewd long term investments by picking up these two major banks. As long as the economy and housing markets continue to improve these two bank stocks look likely to reward investors.

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.