Please Note: Blog posts are not selected, edited or screened by Seeking Alpha editors.

$3 Stock with Huge Potential: I Call it Big C

|Includes: Citigroup Inc. (C)

Looking for a strong large cap stock with long-term potential then I have the perfect holiday pick for you. At one time it was a giants investment bank that controlled the financial world. Due to the credit crunch and worldwide global recession the stock price dropped however I believe that the good times are ahead.

Check out these numbers:
1. Market Cap $78 Billion

2. Daily trading volume of 3 billion shares

3. Enough shares to give everyone in the world 4 shares, 22.86 billion to be exact

4. Billions of dollars in revenue the past 5 years

5. Stock price hovered around $50 from 06’ to 08’

I’m thinking minimum this is a $10 stock if not higher. Nope this in-fact is Citigroup (NYSE:C), the multi-billion dollar investment bank that is currently trading at a meager $3.25. I mean is this a joke. Normally I am the biggest opponent to any stock below $5, my theory being that they are usually on the down and out or a penny stock which posses far to much risk to reward, but in this case Citigroup helped change my mind. With Citigroup trading in the $3-$4 range I feel there is a very low risk to huge reward ratio that I would be ignorant not to capitalize on. With Citi’s latest dilution of shares they are now able to pay off all the TARP. This helps out in both ways; it keeps the government invested within C as a major shareholder but limits their ability to control the company. This gives Citi the ability to return to normal operations, which in most cases was very successful for 20 of the past 22 years. A 91% success rate, in my mind that’s all right.

So you’re still concerned about the Government being a major shareholder?

Don’t be, in fact it benefits Citi. The government has over 7 billion shares invested within Citi, this meaning they are going to do anything to their ability to make sure this invested rises to pay off the numerous amounts of debts they have tallied up. Obama, Peloski, and Co. are not going to take on loss on that investment so this is my insurance that the stock will not fall below $3.25. Consider that to be the support level for all Citigroup shares. I mean Citigroup doesn’t need to have outstanding numbers for the stock to soar. We already know that revenues will be down in 2010 due to lower asset base. However if they are able to show improvement internally that could be a bullish sign for the future prospects of the company. Currently Citigroup is planning on restructuring its business into Citicorp and Citi Holdings, with Citi Holdings carrying mostly non-core and distressed assets. The goal is to unwind Citi Holdings; this will eventually lead to a more stable revenue stream. Adding to this I believe C’s tangible capital levels are more adequate now with the government and public/private investors switching their preferred shares to common equity. Even with all this restructuring I think long-term Citi will be able to regain its earnings power it once had. If so that can make this company’s share prices worth well over $10 if not higher. I feel the company has seen its worst times. Leaving them behind, Citi is at such a discount price I feel it would be foolish not to make a play. It’s a big company, strong brand name, with lots of cash on hand. What doesn’t sound good? Valuations for Citi next year are hard to predict, though take my word that Citi will be trading over $5.50 within a year if not higher.

Disclosure: Long Citi