Investment "Logic"

Citigroup announced fourth quarter and fiscal year 2018 annual results back on January 14.  Results for the quarter were a little mixed, as earnings of $1.61 beat estimates of $1.55, but revenues of $17.1B missed expectations of $17.59B.  While the results weren't what the street was looking for and the initial numbers provided a hit to the stock's price, management's subsequent commentary provided a significant change in sentiment and we've watch the stock price raise closer to its tangible book value in the two weeks since.  Looking a little deeper into the numbers themselves, revenues were mostly hit due to an under performing fixed income market in addition to assets that were sold off as the company continues to shed its remaining legacy businesses that doesn't fit overall goals.  The fixed income issue is something that has been seen across all money center banks and Citigroup is one of the largest players in this space, so it is not a result that is fully ...

On October 12, Citigroup announced third quarter 2018 earnings results and they were rather strong.  Earnings came in at $1.73, above estimates of $1.69.  Revenues came in at $18.38B, which was slightly below consensus for $18.45.  75 million common shares were repurchased as a part of the $6.4B in returned capital to shareholders over the quarter.  The Tangible Book Value also increased to $61.91.   Loan growth was up 3% from the same quarter a year ago and deposits were up 4%.  Revenues from investing were also up nicely as the company took advantage of the volatile markets we've been experiencing since February.  The fact that about half of the company's business comes from overseas also seemed to be a benefit, as there was less impact to their operations compared its peers who are mostly US based.  Despite the fact that revenues missed expectations, it's not as bad as it may seem, given there was a sale of a Mexican Asset Management...

In preparation of the second portion of the CCAR results that will be announced tomorrow, I refilled my position in Citigroup today, purchasing shares at $66.  Unfortunately, I didn't get shares purchased yesterday when the stock was in the $64s and then I pulled the trigger a little too early today, as the market started making a massive swing to the down side around the time of my purchase.  My reasoning for purchasing the stock was that it was near the price target area I've been hoping for since I sold up in the $72 range and we now have a catalyst which I believe will charge all bank stocks in the second half of the year.  The CCAR results have been an inflection point for bank stocks, historically, as they are then allowed to start to distribute their excess capital as per agreement with the Fed.  I believe that Citi's captial distribution plan will be well received by the Fed, enabling them to distribute approximately $20B in dividends and stock buy...

On Friday, April 13, Citigroup announced their results for the first quarter of fiscal year 2018.  Earnings came in at $1.68, beating estimates of $1.61.  Revenues were in line with expectations of $16.86B, delivering results of $18.87B.  The earnings number was a 24% increase from a year ago whereas the revenues were a 3% increase.  It's also worth noting that operating margins were up 4% from a year ago while the efficiency ratio continues to improve for the sixth consecutive quarter, up 50 basis points to 58.4% from a year ago. Looking deeper, Global Consumer Banking (GCB) revenues increased 6% from a year ago with solid growth in both North America and International businesses.  There is a one-time boost from the sale of the Hilton brand cards which has about a 2% impact.  Credit costs rose 3% representing both volume growth and seasoning of their cards business in both North America and International.  NCLs grew overall in GCB, but much of t...

Last week, Citigroup announced fourth quarter earnings and FY 17 results.  Overall, the quarter was solid with earnings of $1.28 and revenues of $17.25B.  This compares to estimated earnings of $1.19 and revenues of $17.22B respectively.  Something else to note is that these numbers are before  what was $22B in charges related to new tax law changes.  That $22B number was two billion more than originally expected, but it seems the market was able to absorb that without too much concern.   Looking a little deeper into the results, it was encouraging to see revenues increase across all regions, where we saw loan and deposit growth in Latin America and increases from wealth management and credit cards in Asia.  Institutional revenues were down slightly due to the continued lack of volatility in the fixed income markets.  Efficiency also improved over the quarter and despite the write down related to the Tax Act, the company is still on tar...

Thursday morning, Citigroup announced third quarter earnings results.  They topped analyst expectations by delivering earnings of $1.42 and revenues of $18.1B.  Expectations were at $1.32 and $17.89, raised slightly more from where it was at when I previewed the results in my last weekly summary.  The company returned $6.4B in capital over the course of the quarter, a majority of that represented through the repurchase of about 81 million shares of stock.  The TBV also rose 6% from a year ago, landing at $68.55 which is in line with my estimates for where that key measurement is going.  Despite the solid beat, the stock's price has fallen about 5% since the announcement. In Global Consumer Banking (GCB) we saw revenue increases across all regions, with Latin America leading the way.  in North America, the Costco card acquisition provides much of the experienced strength, but it also brings much of the increase in Net Credit Loss (NCL) growth.  Ex...

Citigroup announced their second quarter results on Friday.  Earnings beat expectations of $1.13 by posting results of $.  They also delivered top line results of $17.9B, which beat expectations of $17.67B.  Despite the beats, the stock has struggled to rise since the announcement, falling 1.1% last week.   The results were strong, with the company losing less than expected.  They increased revenues by 2% compared to last year and are up 3% on the year so far.  Branded cards were particularly strong in North America, showcasing the strength for this area as the acquisition of the Costco cards are starting to bear fruit.  All regions increased their revenues with international strength showing the health returning to the global economy.  Equity market trading revenues were down 11% due to low volatility, however, this is better than was expected.  The company returned $2.2B of capital to the shareholders in the quarter, including repurch...

Two weeks ago, Citigroup announced first quarter results for 2017.  The company exceeded expectations, as did its peers, by reporting earnings of $1.35 and revenues of $18.12B.  Expectations were for $1.24 and $17.83B respectively.  Revenue growth came from both consumer and institutional banking growth and success.  The Costco card purchase is still working through its steps to realize profits to the company, but it is making good strides and is on track to be accretive in the second half of the year.  Meanwhile the trading arms are having success, helping round out gains overall.  Meanwhile the company continues to shed non-core assets and returned $2.2B to shareholders over the quarter through dividends and share buybacks (about 6% of total outstanding shares over the last year).  These gains resulted in an increase of the TBV to $65.94. It is worth noting that some of these earnings beats are based off of one-time gains, however overall perfo...

Notes: Stock Ratings: 1 = buy at current stock prices, 2 = buy on a 5-10% dip in stock price, 3 = sell on a 5-10% increase in stock price, 4 = sell at current stock prices to raise cash.  Ratings are based upon 12-18 month outlook on stock direction and not necessarily related to moves I make due to financial positioning. Back on Wednesday, Citigroup reported their fourt quarter and fiscal year 2016 earnings results.  The company earned $1.14 per share on $17B in revenues which I find to be about in line with the $1.12 earnings and $17.3B revenues expectations from the analyst community.  Throughout the year, Citigroup returned $11B to the shareholder in the forms of dividends and buybacks.  In regards to buybacks,  Citi bought back 181M shares resulting in a 6% reduction in share count on the year.  All of this resulted in a Tangible Book Value of  $64.57, which was a 7% increase year over year, however it was a decline of 0.2% sequentially f...

Notes: Stock Ratings: 1 = buy at current stock prices, 2 = buy on a 5-10% dip in stock price, 3 = sell on a 5-10% increase in stock price, 4 = sell at current stock prices to raise cash.  Ratings are based upon 12-18 month outlook on stock direction and not necessarily related to moves I make due to financial positioning. Catching up on earnings reports, Citigroup announced their results a couple weeks ago.  Citi delivered earnings of $1.24 on revenues of $17.76B.  The TBV rose to $64.71.  This compares to earnings expectations of $1.16 on $17.37B.  Last quarter, the TBV was $63.53.  The quarterly results were solid both in general and in comparison to other money center banks.  Not the best results, but very solid nonetheless.  Since interest rates continue to stay at their record lows, they were not a factor to this quarter's results.  The major factors resulted in gains from money market investments and gains finally being realize...

Notes: Stock Ratings: 1 = buy at current stock prices, 2 = buy on a 5-10% dip in stock price, 3 = sell on a 5-10% increase in stock price, 4 = sell at current stock prices to raise cash.  Ratings are based upon 12-18 month outlook on stock direction and not necessarily related to moves I make due to financial positioning. On Friday, Citigroup announced second quarter earnings results of $1.24 on $17.55B of revenues.  Earnings beat street expectations of $1.13 rather significantly, however, the top line missed expectations of $17.67B.  All results and expectations continue to be below what was reported a year ago.  While it should be recognized that a portion of the lower earnings is a result of the company continuing to sell off assets that is part of their Citi Holdings portfolio (a group of assets they don't feel fits the company's core competencies), this is also the story for the sector as a whole as gains from trading continues to be volatile and the ke...

Notes: Stock Ratings: 1 = buy at current stock prices, 2 = buy on a 5-10% dip in stock price, 3 = sell on a 5-10% increase in stock price, 4 = sell at current stock prices to raise cash.  Ratings are based upon 12-18 month outlook on stock direction and not necessarily related to moves I make due to financial positioning. Back on April 15 (yeah, I know I'm a bit slow here), Citigroup reported their earnings results for their first quarter.  Earnings beat expectations of $1.07, coming in at $1.10 however, revenues of $17.56B did miss the consensus of $17.61B.  As we knew going into the results, the quarter was much more challenging than management had expected, as were the conditions for all institutional banks.  Trading and investment banking and consumer investment services like wealth management were particularly impacted this quarter, due to investor sentiment.  The latter, in particular, felt its pain from the impacts of the fall of China's markets....

Notes: Stock Ratings: 1 = buy at current stock prices, 2 = buy on a 5-10% dip in stock price, 3 = sell on a 5-10% increase in stock price, 4 = sell at current stock prices to raise cash.  Ratings are based upon 12-18 month outlook on stock direction and not necessarily related to moves I make due to financial positioning. On Friday, Citigroup announced fourth quarter and fiscal year 2015 earnings results.  Earnings beat on both top and bottom lines,  with earning of $1.06 on revenues of $18.45B.  Estimates were $1.05 and $17.87 respectively.  Guidance was basically similar results in 2016 as we saw in 2015 while the company completes it's Costco credit card agreement and aligning itself to where it believes the strengths in the industry.  Tangible book value at the end of the quarter was $60.60, a 6.6% increase over its price at the end of 2015.  This was the fourth consecutive quarter the company beat expectations and the sixth consecutive qu...

Notes: Stock Ratings: 1 = buy at current stock prices, 2 = buy on a 5-10% dip in stock price, 3 = sell on a 5-10% increase in stock price, 4 = sell at current stock prices to raise cash.  Ratings are based upon 12-18 month outlook on stock direction and not necessarily related to moves I make due to financial positioning. Going to my financial stock and finally reviewing their quarter now, we find that Citigroup had a decent quarter - especially when compared to almost all of the other institutional banks.  The company achieved earnings of $1.31 per share on revenues of $18.5B and the tangible book value increased to $60.07.  This is in comparison of earnings estimates of  $1.28 on revenues of $18.62B.  The miss on revenues is a factor, as top line misses do impact stock performance, however, this impact was also driven mostly from currency translation. Since I'm talking about this weeks after the event, I don't think there's really a lot of value in ...

Notes: Stock Ratings: 1 = buy at current stock prices, 2 = buy on a 5-10% dip in stock price, 3 = sell on a 5-10% increase in stock price, 4 = sell at current stock prices to raise cash.  Ratings are based upon 12-18 month outlook on stock direction and not necessarily related to moves I make due to financial positioning. Last week, Citigroup posted their second quarter results which  came   in   pleasantly above expectations.  With earnings coming in at $1.51 and revenues modestly beating at $19.2B.  The biggest factor to the earnings beat was the dramatic decrease in legal expenses, with an ongoing theme that these should continue to improve in the quarters ahead as well.  Diminishing legal concerns help us find clarity in what the company is capable of doing.  Gains made from their trading business was respectable, costs continue to be pulled down under control and the anticipation of looming rate hikes mean banks will be able to make ...

Notes: Stock Ratings: 1 = buy at current stock prices, 2 = buy on a 5-10% dip in stock price, 3 = sell on a 5-10% increase in stock price, 4 = sell at current stock prices to raise cash.  Ratings are based upon 12-18 month outlook on stock direction and not necessarily related to moves I make due to financial positioning. Today Citigroup announced first quarter 2015 results.  Earnings beat analyst expectations, coming in at $1.51 and revenues were basically in line with expectations, with results of $19.8B (revenue estimates apparently were raised from the number I researched back in my weekly summary of $19.3B).  Tangible book value was listed at $57.66.  Additionally, despite currency conversion and regulatory considerations, return on assets were 1.05%, which was higher than the .9% target.  CEO Michael Corbat added to all of this with the key statement of "we are on track to hit our financial targets for the year."   Concerns to note were tha...

Notes: Stock Ratings: 1 = buy at current stock prices, 2 = buy on a 5-10% dip in stock price, 3 = sell on a 5-10% increase in stock price, 4 = sell at current stock prices to raise cash.  Ratings are based upon 12-18 month outlook on stock direction and not necessarily related to moves I make due to financial positioning. Today I purchased small positions in both Pepsico and Citigroup.  Shares of Citigroup were purchased at a price of $51.55 while Pepsico shares were purchased at $94.89.  Clearly both stocks ended the day lower on those prices as the market fell pretty hard on interest rate hike and strong US dollar fears.   Pepsi's stock price has fallen hard after being over $100 earlier this year.  A large part of this is certainly due to the strength of the dollar and impacts I called out that could still impact earnings in regards to the exchange rate of both Russia and Venezuela.  I knew I might be a little early on the move, which is why I...

Notes: Stock Ratings: 1 = buy at current stock prices, 2 = buy on a 5-10% dip in stock price, 3 = sell on a 5-10% increase in stock price, 4 = sell at current stock prices to raise cash.  Ratings are based upon 12-18 month outlook on stock direction and not necessarily related to moves I make due to financial positioning. My apologies, but it seems the software I've been relying on to track stock events is failing me.  As such, I wasn't aware of Citigroup's fourth quarter conference call until Wednesday night and wasn't able to include the pre-analysis during my weekly summary as I normally would.  Regardless, Citi announced fourth quarter and fully year 2014 financial results today.  Fourth quarter earnings came in at $0.06.  This was far below expectations of $0.09. Revenues also missed expectations with results of $17.8B vs. the expected $18.5B.  While much of this downside is related to the $3.5B in write downs for legal expenses, which were an...

Notes: Stock Ratings: 1 = buy at current stock prices, 2 = buy on a 5-10% dip in stock price, 3 = sell on a 5-10% increase in stock price, 4 = sell at current stock prices to raise cash.  Ratings are based upon 12-18 month outlook on stock direction and not necessarily related to moves I make due to financial positioning. Today Citigroup announced their 2014 third quarter results.  Earnings came in at $1.15, which was above the $1.14 estimates and revenues came in at $19.6B compared to the $19B estimates.  Additionally, they have annoucned that they are exiting consumer operations in 11 markets.  Again, Citi Holdings - the pieces that's being looked to be sold off - provided a nice lift.  All of this combined turns into a good overall report.  What makes this company difficult to gauge is the fact that you never get forward guidance quarterly.  I have trouble trying to predict what the future will look like.  However, I'm going to give it...