5 Undervalued Blue Chip Stocks Hedge Funds Are Piling Into

2. Citigroup Inc. (NYSE: C)

Number of Hedge Fund Holders: 90  

Forward PE Ratio: 8.6  

Citigroup Inc. (NYSE: C) is a New York-based investment banking company founded in 1812. It is placed second on our list of 10 undervalued blue chip stocks hedge funds are piling into. The company’s shares have returned 46% to investors in the past twelve months. It is one of the largest investment services in the world with operations in Europe, Africa, Asia, and Latin America, in addition to North America. The company has a separate consumer banking unit to offer traditional banking services. 

On May 7, a report in the Financial Times stated that Citigroup Inc. (NYSE: C) was planning to offer clients cryptocurrency services as interest in digital offerings was exploding across the world. The firm was considering trading, financing, and custody related to crypto, the report claimed. 

On April 26, Citigroup Inc. (NYSE: C) announced that it would continue to invest in digital mortgage capabilities as part of a plan to expand outreach to communities of all types. 

At the end of the first quarter of 2021, 90 hedge funds in the database of Insider Monkey held stakes worth $6.9 billion in Citigroup Inc. (NYSE: C), down from 95 the preceding quarter worth $7.1 billion.

In its Q1 2021 investor letter, Artisan Partners Limited Partnership, an asset management firm, highlighted a few stocks and Citigroup Inc. (NYSE: C)  was one of them. Here is what the fund said:

“We fully exited position in Citigroup. Global financial services company Citigroup made a $900 million clerical error and received a public reprimand from federal regulators. This, after a decade focused on process control, information technology and risk systems, makes the error substantially more costly than just the $900 million mistake. Regulators believe the company’s risk management improvements have fallen short of expectations. To rectify the situation, a process and technology spending surge could negatively affect 2021-2022 profits by 10% to 20%. Trust and confidence are important in large financial institutions, and this incident combined with the CEO’s sudden retirement shook ours.”