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CitiGroup Posts Decent Numbers, Shares Respond

|Includes: Citigroup Inc. (C)
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October 19, 2010
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Hi-C

CitiGroup Posts Decent Numbers, Shares Respond

  Despite continuing questions for banking and finance in general,CITIGROUP (NYSE:C) posted decent numbers yesterday with a Q3 profit of $2.2 Billion.  Things must be getting better, as the US Treasury also announced plans to sell 1.5 billion shares of its holdings.  With that sale, the Treasury will reduce its holding to less than 7% of the shares.  However, plans to unload all of the taxpayers' shares will not be completed by the end of 2010 as originally planned

  Our models remain non-plussed at the moment.  ValuEngine has issued a HOLD recommendation for CITIGROUP. Based on the information we have gathered and our resulting research, we feel that CITIGROUP has the probability to ROUGHLY MATCH average market performance for the next year. The company exhibits ATTRACTIVE company size and expected EPS growth, but UNATTRACTIVE 5-year annualized return.

  Based on available data as of Oct. 19, 2010, we believe that CITIGROUP should be trading at $13.11. This makes CITIGROUP 68.19% undervalued. Fair Value indicates what we believe the stock should be trading at today if the stock market were perfectly efficient and everything traded at its true worth. For CITIGROUP, we base this on actual earnings per share (NYSEARCA:EPS) for the previous four quarters of -$0.04, forecasted EPS for the next four quarters of $0.41, and correlations to the 30- year Treasury bond yield of 3.73%.

  CITIGROUP is a global financial services company that provides consumers, corporations, governments, and institutions with a range of financial products and services, including consumer banking, credit cards, corporate and investment banking, securities brokerage, and wealth management.

Subscribers can check out the latest figures on CITIGROUP from our models HERE

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Market Indices Data
  Latest Change YTD
Dow Jones
11,030.80 -112.88 5.78%
NASDAQ Composite
2,454.60 -26.06 8.17%
Russell 2000
703.99 -6.14 11.03%
S&P 500
1,173.75 -10.96 5.26%

 

ValuEngine Market Overview
Summary of VE Stock Universe
Stocks Undervalued
56.3%
Stocks Overvalued
43.7%
Stocks Undervalued by 20%
25.82%
Stocks Overvalued by 20%
15.24%

 

ValuEngine Sector Overview
Sector Change MTD YTD Valuation Last 12-MReturn P/E Ratio
Energy 0.14% 5.64% 10.83% 7.06% overvalued 23.05% 25.25
Basic Industries 0.27% 2.76% 24.47% 5.95% overvalued 35.40% 25.18
Public Utilities 0.27% 3.35% 2.94% 2.58% overvalued 13.53% 20.19
Consumer Non-Durables 0.81% 4.52% 12.04% 0.57% undervalued 20.24% 17.24
Transportation 0.67% 4.39% 14.55% 0.73% undervalued 17.68% 19.22
Capital Goods 0.59% 4.49% 20.89% 3.72% undervalued 14.80% 21.70
Consumer Services 0.59% 4.14% 14.81% 4.64% undervalued 12.59% 21.77
Technology 0.66% 5.26% 22.36% 4.71% undervalued 23.01% 24.84
Finance 0.85% 3.96% 15.99% 5.44% undervalued 7.05% 18.15
Consumer Durables 0.80% 4.36% 17.32% 6.87% undervalued 23.52% 19.85
Health Care 0.83% 4.31% 24.04% 9.12% undervalued 5.53% 20.80

 

 
 
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Disclosure: very small long position