We recently compiled a list of the 10 Most Profitable Cheap Stocks to Buy Now. In this article, we are going to take a look at where Citigroup Inc. (NYSE:C) stands against the other most profitable cheap stocks to buy.
US stocks rose on Friday, May 2, as the S&P 500, Dow Jones Industrial Average, and the tech-heavy Nasdaq all posted impressive gains. The S&P 500 added nearly 1.5% and this marked the ninth straight day of gains to mark the longest winning streak for the S&P 500 since November 2004. The Dow rose 1.4% to also report a ninth winning day in a row. Meanwhile, the Nasdaq gained roughly 1.5%.
READ ALSO: 13 Best Aggressive Growth Stocks to Buy Now and 14 Best American Tech Stocks To Buy Now.
The rally comes after China signaled openness to trade talks and a better-than-expected monthly US jobs report. In April, the US economy added 177,000 nonfarm payrolls, which was more than the 138,000 economists had expected. The unemployment rate remained steady at 4.2%. This data indicated resiliency in the labor market despite stock market uncertainty in April due to tariff concerns.
Investors were also encouraged by indications that the US-China trade war could be easing. On Friday, China said it is evaluating recent US proposals for trade talks to see how serious Trump’s administration is about a change in policy stance. China’s commerce minister stated that the “door is open” if the US would agree to pull back on reciprocal tariffs. These comments helped reduce concerns about the risk of an economic slowdown by the tariffs.
Overall, hopes for improved US-China relations combined with solid job growth helped boost confidence on Wall Street.
Methodology
To compile our list of the 10 most profitable cheap stocks to buy now, we used the Finviz stock screener to find stocks with a forward P/E ratio of less than 15. We sorted our results based on market capitalization and picked the top 25 cheap stocks trading at under 15 times their forward earnings as of April 29, 2025. Next, we focused on profitability and narrowed our choices to stocks that had trailing twelve-month (TTM) net income of more than $1 billion. Finally, we focused on the top 10 profitable stocks most favored by institutional investors. Data for the hedge fund sentiment surrounding each stock was taken from Insider Monkey’s Q4 2024 database of more than 1,000 elite hedge funds. The 10 most profitable cheap stocks to buy now were then ranked in ascending order based on the number of hedge funds holding stakes in them as of Q4 2024.
Why do we care about what hedge funds do? 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).
A financial advisor in a suit, pen in hand, talking to a client in the bank.
Citigroup Inc. (NYSE:C)
Forward P/E: 9.38
TTM Net Income: $12.15 Billion
Number of Hedge Fund Holders: 101
Citigroup Inc. (NYSE:C), or simply Citi, is an American multinational investment bank and financial services company that operates as a global bank for institutions with cross-border needs, a global leader in wealth management, and a personal bank in the US. The company does business in over 180 countries and jurisdictions to serve individuals, investors, corporations, institutions, and governments with a wide range of financial products and services. Citigroup Inc. (NYSE:C) is one of the most profitable stocks to invest in.
On April 16, RBC Capital Markets reduced its price target on Citigroup Inc. (NYSE:C) from $85 to $78 but maintained an “Outperform” rating. This decision came after the company’s latest quarterly earnings beat both RBC Capital’s and the broader market’s expectations. RBC analyst Gerard Cassidy noted that Citigroup Inc. (NYSE:C) has managed well despite uncertain global market conditions and that the bank’s management is confident about achieving their medium-term financial goal, which is a return on tangible common equity (ROTCE) of 10-11% by 2026. This target will be an improvement compared to the 9.1% ROTCE reported in Q1 2025. The company’s Services division was the strongest as it boasted a 26% ROTCE, while other notable segments were Markets, US Personal Banking, Banking, and Wealth Management with ROTCEs of 14%, 13%, 11%, and 9.4%, respectively. Cassidy believes that for Citigroup Inc. (NYSE:C) to achieve its financial goals, it will depend on steady revenue growth and strict expense management. The analyst indicated that while the targets look achievable on paper, the key to success will depend on how well Citigroup Inc. (NYSE:C) executes its plans.
Overall, C ranks 5th on our list of the most profitable cheap stocks to buy now. While we acknowledge the potential of 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. There is an AI stock that went up since the beginning of 2025, while popular AI stocks lost around 25%. 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 Buy Now According to Billionaires.
Disclosure: None. This article is originally published at Insider Monkey.
