Citigroup (C)

The banking industry, for at least the past 15 years, has been one of the most profitable and stable industries. So even if Citi is down right now, it will come up again. Consider the basics of banking, you give a company some money, they lend it out to people for anywhere between 5% - 20% and pay you roughly 0.5% on your common checking account. Then, every time you want access to your money, you have to pay a fine, and every month for the privilege of lending your money to them, they charge you a monthly fee. It’s a thing of beauty isn’t it? To any business man or investor, it is.

As of March 3rd, Citigroup’s price is $23.11/share. With total assets totaling over $113B, this puts Citigroup’s book value at $21.80 / share. In the past 10 years, Citigroup’s share price has never come this close to it’s book value. Not to mention when you are paid a cool 5.5% in dividends while you wait out the storm. This would be a great time to take a long term approach on this stock.

Global Reach : The firm maintains operations in every major geography, and emphasizes a well diversified income statement spanning across its business lines. There are very few universal financial institutions that can provide this advantage.

and the first sign Citi wo't be all things in th world of banking

Cit will sell its German retail business to France's Credit Mutuel for $7.7 billion, it said on Friday , July 11, part of a global reorganization of the U.S. bank.

Citi in Germany, which makes most of its money from loans for everything from televisions to cars, contributed nearly 3 percent of global pretax profit in 2006 at the bank, which has been roiled by market turmoil.

It is the centerpiece of Citi's business in Europe and its sale signals a change in direction for the global financial services powerhouse.

Citi said that the sale would result in an after-tax gain of around $4 billion and boost its Tier 1 capital ratio by 60 basis points as of the end of March.

At this price level, it does make sense for buying as a long-term core holding (10yrs timeframe). The franchise and brand is too strong to be ignored.

It's a buy and I intend to accumulate slowly through the months.

Citigroup has shifted towards an aggressive growth strategy by making substantial acquisitions in emerging markets. A particular emphasis has been expressed in Japan and India.

Cost Cutting Works : In April 2007 Citigroup announced its plan to cut 17,000 jobs and move 9,500 jobs to lower level positions, to save it 10.4 billions dollars in spending.

At the current level, Citigroup has a dividend yield upwards of 6%, which is compelling.