We recently published an article titled Greenhaven Associates: Top 10 Stocks to Invest in. In this article, we are going to take a look at where Citigroup Inc. (NYSE:C) stands against the other stocks.
Edgar “Ed” Wachenheim III is the founder, CEO, and chairman of Greenhaven Associates, a hedge fund management company that manages over $7 billion in investments. He serves as the vice chairman of the board of Central National-Gottesman, the chairman of WNET’s board, a trustee at the Museum of Modern Art, and a life trustee who previously chaired both the executive and investment committees of the New York Public Library. Additionally, he is a trustee emeritus and former vice chair at Skidmore College, as well as a trustee emeritus and past board president of Rye Country Day School. A notable figure in the investment community, Ed’s most recent, prominent achievement is the publishing of his book “Common Stocks and Common Sense” in 2016.
Wachenheim’s book, published by Wiley in April 2016, details his investment strategies and provides insight into his career as a successful value investor. In “Common Stocks and Common Sense”, he explains his approach to investing in undervalued companies that face a low probability of permanent loss, with a goal of achieving an annual return between 15% and 20%. He typically holds stocks for multiple years until they appreciate as expected and makes very few changes to his holdings in the shorter term. Even when his investment thesis proves incorrect, Wachenheim argues that his investments still tend to generate positive returns, given that the stock market has historically returned an average of 9% to 10% annually. His strong emphasis on downside risk and capital preservation is a hallmark of his investment philosophy. He also contributed a chapter to the 2017 book “Harriman’s New Book of Investing Rules”, and a second edition of his own book was released in 2022.
Greenhaven Associates was founded in 1987 as a branch of Central National-Gottesman, one of the largest global marketers and distributors of paper, packaging, wood, and metals. Wachenheim invests with a long-term time horizon of three to four years, disregarding short-term performance, analyst predictions, and hedge fund sentiment. This disciplined approach seems to work in Greenhaven Associates’ favor, as the hedge fund has achieved an impressive average annual return of approximately 19% between 1988 and 2017.
Beyond his career in finance, Wachenheim has been deeply involved in philanthropy and nonprofit leadership. He served on the Skidmore College board from 1993 to 2001, where three of his children studied, and later became vice chair and chair of the investment committee until 2003. He has also been a long-time supporter of Williams College, his own alma mater, where a new science center is named after him. Additionally, he is a life trustee of the New York Public Library, where the Trustees Room has been named in his honor. Wachenheim chaired the board of WNET, the PBS affiliate, from 2017 to 2022, having joined the board a year earlier.
His extensive philanthropic work includes serving on the boards of UJA-Federation of New York, the New York Foundation (1990–1999), and the Arthur Ross Foundation. He and his wife oversee the Sue & Edgar Wachenheim Foundation, a charitable organization with reported assets of $438 million in 2022. The foundation has directed significant contributions to cultural and educational institutions, including Williams College, Skidmore College, the Museum of Modern Art, WNET, and the New York Public Library.
According to its 13F filing for Q4 2024, Greenhaven Associates held stocks worth a total value of over $6.7 billion with stakes in 22 companies. Notably, the hedge fund’s recent portfolio modification has revealed that over 65% of its hedge fund is invested in just four stocks.
Our Methodology
The stocks discussed below were picked from Greenhaven Associates’ 13F filings for the fourth quarter of 2024. They have been compiled in the ascending order of Greenhaven Associates’ stake in them as of December 31, 2024. To provide readers with a more holistic analysis of each stock, we have included the hedge fund sentiment regarding each company using data from over 900 hedge funds tracked by Insider Monkey in the fourth quarter of 2024.
Why are we interested in the stocks that hedge funds show interest in? The reason is simple: our research has shown that we can outperform the market by imitating the latest top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 275% since May 2014, beating its benchmark by 150 percentage points (see more details here).
A team of financial advisors huddled around a desk, discussing the best investment strategy for their client.
Citigroup Inc. (NYSE:C)
Number of Hedge Fund Holders as of Q3: 88
Greenhaven Associates’ Equity Stake: $1.19 Billion
Citigroup Inc. (NYSE:C) is a leading multinational financial services company headquartered in New York City, formed in 1998 through the merger of Citicorp and Travelers. As the third-largest banking institution in the United States, Citi is part of the nation’s “Big Four” banks alongside JPMorgan Chase, Bank of America, and Wells Fargo. Recognized as a systemically important financial institution by the Financial Stability Board, it ranked 36th on the Fortune 500 and 24th on the Forbes Global 2000 list in 2023. Citigroup Inc. (NYSE:C) operates a vast global network spanning 180 countries, serving 85% of Fortune 500 companies and managing daily transactions worth approximately $5 trillion.
Citi operates through two primary divisions: Institutional Clients Group (ICG) and Personal Banking and Wealth Management (PBWM). ICG provides investment and corporate banking services, treasury and trade solutions, securities services, and custodian banking, while PBWM includes Citibank’s retail banking operations and credit card services. The company’s global reach, extensive financial solutions, and strong market presence have solidified its position as one of the leaders in the banking industry.
Ed Wachenheim holds roughly 16.87 million shares of Citigroup Inc. (NYSE:C) as of Q4 2024, which represents 17.56% of his portfolio. Insider Monkey saw that 88 hedge funds out of the 900 hedge funds held stakes in the company as of the end of Q3 2024 as opposed to 85 in Q2 which suggests an overall positive hedge fund sentiment about the stock.
Under Jane Fraser’s leadership, Citigroup Inc. (NYSE:C) demonstrated strong performance in 2024, promoting over 31,000 employees as part of its efforts to retain top talent amid a major restructuring. The bank achieved revenue growth across all five of its main divisions in 2024, with corporate and investment banking surging by 32%. However, with continued cost-cutting and strategic adjustments, the company is making steady progress toward its long-term profitability goals, reinforcing its strength in the financial sector.
Citigroup’s Q4 revenue was $19.58 billion with a year-on-year growth of 12%. Its adjusted operating income of $3.80 million increased 280.69% as compared to the same quarter in 2023. Moreover, the company’s EPS for Q4 2024 was announced as $1.36, which was $0.12 more than the estimated EPS of $1.24.
Diamond Hill Capital Long-Short Fund mentioned Citigroup Inc. (NYSE:C) in its first quarter 2024 investor letter. Here is what it said:
“Other top Q1 contributors included Meta Platforms, Citigroup Inc. (NYSE:C) and Walt Disney. Banking and financial services company Citigroup’s restructuring efforts are ongoing, and it continues remediating regulatory issues and building capital in anticipation of increased requirements. The company expects to see expenses fall meaningfully in the second half of 2024, bolstering the outlook from here.”
Overall C ranks 3rd on our list of Greenhaven Associates’ top stock picks. While we acknowledge the potential for C as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than C but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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Disclosure: None. This article is originally published at Insider Monkey.