As per The Vilas Fund’s Q1 2019 Investor Letter, the fund returned 34.3% in the first three months of 2019. We recently shared the letter, hence you can track it down here. Aside from its quarterly performance, The Vilas Fund’s shared its opinion on a couple of stocks from its portfolio. Among those stocks was Citigroup Inc. (NYSE:C), for which the fund said it is currently managed the best it had ever been in the last four decades.
Citigroup continues to produce modest revenue and earnings growth, to the tune of 6% annually over the last 5 years, but the company is returning roughly 13% of its market capitalization in dividends and share repurchases annually. Thus, at today’s price with no valuation expansion, investors should earn 19% if the future equals the past. We believe Citigroup is being managed much better than at any time in the last 40 years and that the future will prove to be better than the past. Therefore, the shares are trading too inexpensively, and a 50% valuation expansion should be the result. If true, owning these shares should be a home run.”
Citigroup is an NYC-based investment bank and financial services corporation with a market cap of $157.01 billion. Year-to-date, its stock gained 26.84%, and on May 10th it closed at $67.90. It is trading at a price-to-earnings ratio of 9.88.
At the end of the fourth quarter, a total of 90 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of -7% from the previous quarter. Below, you can check out the change in hedge fund sentiment towards C over the last 14 quarters. With hedgies’ capital changing hands, there exists a few noteworthy hedge fund managers who were boosting their holdings meaningfully (or already accumulated large positions).
The largest stake in Citigroup Inc. (NYSE:C) was held by ValueAct Capital, which reported holding $1641.2 million worth of stock at the end of September. It was followed by Eagle Capital Management with a $1402.5 million position. Other investors bullish on the company included Greenhaven Associates, Diamond Hill Capital, and D E Shaw.
This article is originally published at Insider Monkey.