Should Value Investors Be Watching Citigroup?
Value investors typically look for stocks that are trading below their intrinsic value, and after a difficult 2020, Citigroup (NYSE: C) meets that criteria. Like nearly every other bank, it has been suffering due to the ultra-low-interest-rate environment and the higher credit costs that came with the coronavirus pandemic. But Citigroup also faced company-specific regulatory issues that sent its shares falling further than those of some of its peers.
Now, as the banking sector heads toward what could be a rebound this year and Citigroup makes progress on correcting those issues, it is certainly a stock value investors should be watching.
The best gauge of a bank's intrinsic value is its tangible book value, a metric that starts with the bank's equity -- assets minus liabilities -- and takes out intangibles that can be hard to accurately calculate. At Friday's prices, Citigroup trades around $63 per share -- about 85% of its tangible book value per share of $73.83 as of the end of the fourth quarter.
Source Fool.com
