Is Citi Stock A Buy Now?

I heard the news this morning that Citigroup CEO Vikram Pandit bought 750,000 shares of Citigroup stock (C) on the open market yesterday when the share price dropped below $9. In addition to CEO Pandit, other three executives also bought a total of 550,000 shares. Is this the sign of confidence?

Currently trading slightly above $9 per share, Citigroup stock has been hit very hard after the world’s biggest bank by revenue had to write-down billions of bad loans. Since the credit crisis began more than a year ago, Citigroup has lost at least $13 billion and slashed tens of thousands of jobs (Citi announced it’s cutting another 10,000 works worldwide). Comparing to its major rivals, Bank of America (BAC) and JPMortgan Chase (JPM), Citi stock has the worst one-year performance, down more than 70%.

Citi stock

When I looked at the bank dividend yield nearly half a year ago, Citi was pretty impressive when the stock was traded twice as much higher as its current price. The dividend yield, 6.60% at $0.64 per share, is till very good (as long as they don’t cut it). At least that’s a little bit comforting for owning the stock (Why? If you reinvest the dividend instead of taking cash distribution, you can buy more shares when the price is low and you will be rewarded if the stock recovers later).

So, do you think Citi stock is a buy at the present price level? Or you want to wait a little bit to get into the banking sector?

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Update: I eventually bought 600 shares of Citi, at a much lower price of $1.05 a share with Scottrade (open a Scottrade accoutn and get 3 commssion free trades).

Update (January 5, 2011): Barron’s had an article, Citigroup Q4 Could Make or Break the Bank, recently which said that:

Citigroup’s (ticker: C) fourth-quarter-earnings report has the potential to decisively push the stock above $5, or sentence the $4.85 stock to that murky area of penny stocks that is picked over by hordes of individual investors, and needed by hedge funds and others sophisticates making big bets on stock gyrations.

Maybe the buying opportunity is coming back again? I certainly don’t want to see the stock become a penny stock again.

Update (March 21, 2011): Citi announced that it will do a 1:10 reverse stock split and pay dividend in the second half of the year.

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19 Responses to “Is Citi Stock A Buy Now?”

  1. Tim |  Nov 14, 2008 at 5:54 pm

    I do…you will also note that several funds have also started buying up Citi shares. i wonder at what price pandit and execs got their shares. at $6-7million in common stock, i think is a gesture. i’d like to see pandit buying something like $15-$20million in common stock as a confident sign. shedding 35k jobs is gonna do some good towards their balance sheets as well. they’ll sell of some more assets to slim down which they need to do. what they really need is an asset with heavy deposits though and the wachovia deal was a big loss. they should have gone after wamu’s good assets, which I thought they would have done. maybe Chevy Chase or US Bank (not sure what buffet would have to say about this since berkshire has large us bank positions and also BofA) would be good. on 10nov there was talk about citi in talks with regional banks. yesterday there were reports about Chevy Chase bank, and now we have pandit and pals buying citi shares. hmmm, coincidence? i think if a chevy chase bank acquisition happens, SEC is going to investigate pandit and co’s citi share acquisitions today. who knows, it may be legit. if citi can get a couple of regional banks like chevy and a suntrust or bb&t, etc, that would really help out what they lack in deposits. I think pandit and co feel confident in a regional(s) acquisition soon, so citi at 9 seems nice to me. bought today and will buy more tomorrow.

    I should buy wells or bac, but i’ve decided to take more risk with GE and Citi. I also have visa.

    next in line will be techs, i’m holding off on google and i just don’t think that apple is gonna have a good holiday, so i’m holding off on it too; however, both are on my short list.

    i’ve been scooping up Vanguard total stock market ETF (VTI) instead of buying the fund directly, because i hate the two day delay which is not good with these 1000pt swings in a day.

  2. market folly |  Nov 16, 2008 at 3:21 am

    if you like it at $9 why not wait and see if it dips to $8 or lower. If it does you can buy it cheaper. And if you miss that dip, you can always buy it when it comes back up to $9 again.

    I personally still am staying away from financials as there is a big mess still ahead of us, especially related to consumer credit debt and auto loans.

    If you really want to own C, i’d recommend selling puts at a lower strike (like Buffett did with BNI). He basically wants to own the stock at x price so he sells puts and earns a premium until he is exercised. Might be too complicated of a strategy for some people newer to options but just a suggestion.

  3. Super Saver |  Nov 25, 2008 at 9:17 am


    For now, I’ve treating all financial stocks as toxic, no matter what the price. I made the mistake of buying some financials on October 3, 2008, the day the bailout bill passed. The stocks are already down 40-50%.

    For the next rally, I will strongly consider buying the Ultrashort Financial Proshares (SKF), which is 2X inverse the financial index.

  4. kenneth |  Nov 29, 2008 at 5:48 am

    I think citi is a steal right now. My instincts tell me people are underestimating this stock. Buy now!! The prices are low. They can’t get no lower. But I wil say though, my cause of concern is that after the holidays people are not going to be spending. I think everything wil slow down for a while next year. But citi stocks wil continue to increase along with the S&p 500 index

  5. Darius McCaskil |  Feb 27, 2009 at 7:03 pm

    shoud you buy now $1.50 a share

  6. mary |  Mar 02, 2009 at 6:36 pm

    now at 1.22 what do you think? I think might be worth a gamble

  7. FELTON J. ALFRED |  Mar 05, 2009 at 8:06 pm

    I have never invested in stock before, but looking at the market now I think it is the right time to buy. I need someone to get back with me with instruction on buying Citi Stock.

  8. Shea |  Mar 09, 2009 at 1:54 pm

    Given the fact that Citi Group is now trading around 1.04 per share, and bid is 1.05, I would definitely buy this stock. The goverment gave the company unparralled amounts of money (what Citi did with that money was unwise however), and they goverment should not and most likely will not let them fail. As a long term investment, you really have nothing to loose. Unless it drops to 0.50 cents of course.

  9. BRUCE PEARLMAN |  Mar 10, 2009 at 11:38 pm

    I just bought 600 shares @ $1.57 history repeats it’s self.. the time is now.

  10. Ben |  Mar 12, 2009 at 7:56 pm

    I just missed the price of couple days ago at 1.05 dollars…Now, Citi jumped up to almost 1.70 dollars. Expensive at 1.70? I buy 3000+ shares of it, is it risk?

  11. Shea |  Mar 13, 2009 at 5:05 am

    We’ll there are a couple of pieces toi this puzzle that make it quite an interesting buy. For the market, this rally has put some trust back into traders that would actually move the market. However, eventually many people that are in it for the short term will eventually sell to make a profit, leaving this stocks to crumble again. YET, Citi group has just announced that 1. They do not need any money from the goverment as 2. The company made a profit in the past quarter and 3. The company is hiring a couple more board of directors (that are former bank ceos). If I were you, I would invest in Citi Group as a long term stock, because eventually, it will rise. But with the short lived rallys and sharp sell-offs, expect also to wake up one morning and find the futures in the negatives as well very soon. *cnbc just announced that Citi’s sister company in Germany is up 8% today*

  12. Sun |  Mar 13, 2009 at 8:59 am

    Citi has come back a lot since it fell below $1 last week. That’s a lot of gain in a very short period of time, even though in dollar amount it isn’t that much that the stock is still quite cheap (again in price only). I can’t predict whether the stock will keep going straight up from here or will pull back. If you want to buy it, maybe you can buy in several small amount instead of one 3000 share order to protect yourself. Again, it is risky because any more bad news will likely bring the stock down a lot (percentage wise).

  13. Bill |  Mar 18, 2009 at 4:53 pm

    I bought 1000 shares at 1.24, I’ll probably sell off half in the near future and then pay close attention to their quarterly report 4/17.

  14. L P |  Mar 19, 2009 at 2:43 pm

    I would like to buy citi stocks today but don’t have a clue on how to do this. I want to be able to also monitor the market. please help me.

    • ben |  Jan 14, 2010 at 7:41 pm

      die. if you dont have google then just die.

  15. nt |  Mar 23, 2009 at 11:34 am

    I heard that citi group is reverse splitting the shares. Is this good for the investors

  16. Robert |  Apr 15, 2009 at 7:42 pm

    the share is now at about $4, for someone who “missed” the $1-$2 rates, any hope it will go back to these rates in the near future after the reports release day on the 17th?

  17. Macario JAramillo |  Dec 08, 2009 at 1:20 am

    Twelve years ago I retired. I had $20,000 saved up and bought 1,050 shares in a mutual fund (NFEAX.) My investment has never made me a profit. During 9/11 I lost half of it but now it is almost back to what it was in the begining. It is now worth $19,986.00 in twelve years. Am I suppose to buy and sell?
    I boought the stock and just left it alone. What if my investment goes up from $19.00 a share to $19.30 the next day then to $20.50 then to $21.00 but on the fourth day it dips down to $19.00 again what’s the use of investing in the stock market? Do I need to start selling high and buying low? Just leaving it in doesn’t seem to profit me any. Thank you

    • Mitch |  Mar 29, 2011 at 11:33 am

      yes, if you leave the stock it will just fluctuate. For example, Walmart floated at $50 when released back in the 80′s, and is still around that price today. So unless you want just dividends/compound interest…then you must buy/sell to make real money.