We recently published a list of the 15 Best and Cheap Stocks to Buy According to Billionaires. In this article, we are going to take a look at where Citigroup Inc. (NYSE:C) stands against the other cheap stocks held by billionaires.
The S&P 500 index is trading around its all-time high, and the short-term market indicators aren’t much evident with the latest U.S. tariff policy under implementation.
Billionaire investor and CEO of Berkshire Hathaway Warren Buffett sold a record $134 billion worth of stock in 2024. Buffett’s move is considered a benchmark among investors to assess the market. Historically, when Buffett’s firm becomes a net seller, it’s often followed by below-average market performance. Many believe that this could be a signal of stock market underperformance in 2025. Cheap stocks held by billionaire investors can be a great option considering the current uncertainty in the market.
In an interview with CNBC on March 11, chief market strategist at MAI Capital Management, Chris Grisanti, pointed out the significance of recognizing market signals and valuations to understand the investment landscape effectively. Grisanti noted that entry price is crucial in investing, especially as valuation distortions have spiked in recent years with growth stocks massively outperforming value stocks. He highlighted the change in market trends, pointing out that corrections were often driven by tech stocks impacting the market down, resulting in what he viewed as natural and healthy pullbacks.
Chirs said that the decline in the market has occurred due to the underperformance of economically sensitive sectors such as banks, airlines, and consumer discretionary stocks, indicating a potential economic slowdown. On top of that, President Trump’s tariff policy can be a burden on the economy with local businesses suffering from high tariffs.
Tariff Policy Impact
According to British economist John Ross, President Trump’s tariff policies will negatively impact the U.S. economy. “The only issue with the tariffs is which combination of bad effects you will have,” said Ross in a recent interview with Xinhua.
“But the Federal Reserve’s job is to contain inflation. Therefore, if it sees inflationary pressures, the Federal Reserve will raise interest rates, but it will slow down the economy,” Ross added.
Billionaire investor Leon Cooperman in a recent interview during the Squawk Box show on CNBC said that the president is on the right track, but he is doing things in a very destabilizing manner. “The president is focusing on reducing the deficit, which is the right thing to do,” said Cooperman.
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Our Methodology
For the best cheap stocks to buy according to billionaires, we analyzed Insider Monkey’s exclusive database of billionaire stock holdings. We selected the 15 best and cheapest stocks to buy with a forward P/E ratio of under 15. The stocks are ranked in ascending order of the highest number of billionaire investors, updated as of Q4 2024. For the stocks with the same number of billionaire investors, we have used the forward P/E ratio as a secondary metric to rank the stocks.
Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the 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 373.4% since May 2014, beating its benchmark by 218 percentage points (see more details here).
Citigroup Inc. (NYSE:C)
Forward P/E Ratio: 9.27
No. of Billionaire Investors: 17
Citigroup Inc. (NYSE:C) is a diversified financial services holding company. It operates through the Services, Markets, Banking, Wealth, and U.S. Personal Banking segments. The company offers a range of financial services to consumers, corporations, governments, and institutional clients globally. Its offerings include retail banking, investment banking, securities brokerage, wealth management, and more.
Citigroup Inc. (NYSE:C) is expanding its Flex Pay “pay-over-time” tool through strategic partnerships, notably with Apple Pay, to enhance customer awareness and usage. Flex Pay has experienced consistent double-digit growth, growing by 25% from 2023 to 2024, driven by high usage by online customers for short-term financing.
On March 10, Betsy Graseck from Morgan Stanley maintained a Buy rating on C shares, keeping a price target of $110 per share. The analyst remains bullish on Citigroup following its strong 2024 results. For FY2024, the company posted a net income increase of approximately 40% to $12.7 billion. The bank also surpassed its full-year revenue target, by growing the revenue by 5% year-over-year to $81.1 billion. The growth in 2024 was driven by a record year in the Services segment which soared 9%, driven by new mandates and fee growth. Citigroup Inc. expects its expenses to be slightly below 2024 levels, with a focus on delivering positive operating leverage.
Diamond Hill Capital Long-Short Fund stated the following regarding Citigroup Inc. (NYSE:C) in its first quarter 2024 investor letter:
“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 13th on our list of the cheap stocks to buy according to billionaires. While we acknowledge the potential of C as an investment, our conviction lies in the belief that 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.
READ NEXT: 20 Best AI Stocks To Buy Now and 30 Best Stocks To Invest In According to Billionaires.
Disclosure: None. This article is originally published at Insider Monkey.