LONG Citigroup, most undervalued US bank
Reasons to buy:
-one of warren buffet's recent buys
-Trading below 5 year avg p/b valuations (0.80) at 0.51
-Book value of 94USD per share, fair value = 75USD per share VS current price of 46USD (63% upside)
-4% dividend yield
-Cheapest out of all US banks
-Rising interest rates pushes up Net interest margins
While slowing economic growth will curtail near-term loan growth, expect that rising interest rates, robust economic growth, and moderating inflation will provide a good tailwind for banks. These factors will lead to rising interest income, maintaining low default rates, and lowering charge offs.
-one of warren buffet's recent buys
-Trading below 5 year avg p/b valuations (0.80) at 0.51
-Book value of 94USD per share, fair value = 75USD per share VS current price of 46USD (63% upside)
-4% dividend yield
-Cheapest out of all US banks
-Rising interest rates pushes up Net interest margins
While slowing economic growth will curtail near-term loan growth, expect that rising interest rates, robust economic growth, and moderating inflation will provide a good tailwind for banks. These factors will lead to rising interest income, maintaining low default rates, and lowering charge offs.
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