Is Citigroup (C) a Smart Long-term Buy?

Generation PMCA recently released its Q3 2020 Investor Letter. The fund is managed by co-founders Randall Abramson and Herb Abramson. The investment firm serves its clients through two distinct areas: Portfolio Management and Capital Advisory services. You should check out Generation PMCA’s top 5 stock picks for investors to buy right now, which could be the biggest winners of this year.

In the said letter, Generation PMCA highlighted a few stocks and Citigroup Inc (NYSE:C) is one of them. Citigroup Inc (NYSE:C) is an investment banking company. Year-to-date, Citigroup Inc (NYSE:C) stock lost 35.4% and on November 20th it had a closing price of $51.65. Here is what Generation PMCA said:

“Citigroup’s operations span more than 160 countries. Faced with record low interest rates, rising loss provisions, and subdued lending, the financial sector has been one of the worst performing groups year-to-date. However, earnings appear to have stabilized for the major banks. The company had its own internal issues too, having to pay significant fines for regulatory deficiencies. They are spending over $1 billion on compliance matters. With these issues being addressed and the company’s dominant network intact, it is well positioned to benefit from a global economic recovery. We have assumed a gradual recovery of earnings to former highs over the next few years. Return on tangible common equity should exceed 10% by 22, implying earnings per share above $8. While shares have risen recently, they still trade at only 6x our 2-year-out earnings estimate and yield just under 4%.”

Citigroup Inc (NYSE:C), Citi, Sign, building, Logo, Symbol

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In Q2 2020, the number of bullish hedge fund positions on Citigroup Inc (NYSE:C) stock increased by about 12% from the previous quarter (see the chart here), so a number of other hedge fund managers believe in Citigroup’s growth potential. Our calculations showed that Citigroup Inc (NYSE:C) is ranked #23 among the 30 most popular stocks among hedge funds.

The top 10 stocks among hedge funds returned 185% since the end of 2014 and outperformed the S&P 500 Index ETFs by more than 109 percentage points. We know it sounds unbelievable. You have been dismissing our articles about top hedge fund stocks mostly because you were fed biased information by other media outlets about hedge funds’ poor performance. You could have doubled the size of your nest egg by investing in the top hedge fund stocks instead of dumb S&P 500 ETFs. Below you can watch our video about the top 5 hedge fund stocks right now. All of these stocks had positive returns in 2020.

Video: Top 5 Stocks Among Hedge Funds

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Disclosure: None. This article is originally published at Insider Monkey.