C
I Initiated a position in C today at $67.96,here is what I like.
1) C trades at a significant discount too book value. With Tangible book value being over $89.
2) C pays a healthy Dividend of 3.3% And I expect that dividend to increase in about 5 months if pattern holds. I also expect C Share repurchase to start picking up in the future quarter, which will be another accretive boost to earnings in the future.
3) C has a great valuation for a big bank in the space where it trade sub 9x this years estimates and slight over 7x next years estimates. As longer-term I expect earnings growth to be better here, because of the unlocking of higher ROTCE levels (Was underachieving thanks to previous managements) in the coming years, and it recently has become obvious to me that the CEO who admittingly I might of been late on is about to unlock the value in the stock, and My confidence Levels have grown in the execution of this story, and if you believe that the stock shouldn't trade at a discount too tangible book at the very least. ROTCE was 7.0% in FY 24 up from 4.9% in FY 23, should improve further in FY 25 on it's way to 10-11% in FY 26, which means profitability should increase significantly here in the coming years.
Conclusion: I like C here and will add more on weakness. All is just my opinion, and I could always be wrong though.
AI
