Monday, February 25th 2010

Is Citibank’s Stock Undervalued?

Citibank’s Stock, C, has been on a downward trend for most of 2010. Has this stock bottomed? Are we approaching a good entry point? We absolutely believe so. Despite the inherent risk that this stock carries, we believe it is a long term buy at these levels, and any further drop from these levels ($3.18) should be used to accumulate the position. This company’s stock has been severely beaten down over the last 18 months with all the other financials. Furthermore, the stock continues to be weighed down because of the dilution that came along with the government bailout of 2009 and ongoing exposure to the toxic US real estate market.

However, it is important to recognize that Citibank remains a global brand with very strong mainstream banking along with an ever improving balance sheet shored up by the government bailout.

As such, we believe the stock to be undervalued at these levels with plenty of room for improvement. This price point presents a great trading opportunity for the aggressive traders as well as a strong entry point with an 18 months price target of $6.00+.

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-MarketFace

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