Top 5 Stock Picks of Mason Morfit’s ValueAct Capital

In this article, we discuss the top 5 stock picks of Mason Morfit’s ValueAct Capital. If you want our detailed analysis of these stocks, go directly to the Top 10 Stock Picks of Mason Morfit‘s ValueAct Capital. 

5. Citigroup Inc. (NYSE:C)

ValueAct Capital’s Stake Value: $971,720,000 

Percentage of ValueAct Capital’s 13F Portfolio: 11.25%

Number of Hedge Fund Holders: 79

Citigroup Inc. (NYSE:C) is one of the Big Four American banking institutions and a multinational financial services corporation, offering asset management, retail banking, commodities, equities trading, insurance, investment management, mortgage loans, mutual funds, private equity, risk management, and wealth management. 

ValueAct Capital owns 13.8 million Citigroup Inc. (NYSE:C) shares as of September 2021, worth $971.7 million, representing 11.25% of the fund’s total 13F securities. 

Credit Suisse analyst Susan Roth Katzke on December 10 lowered the price target on Citigroup Inc. (NYSE:C) to $76 from $82 and kept an Outperform rating on the shares. The analyst slashed the price target to reflect the impact of the wind down of Citigroup Inc. (NYSE:C)’s consumer banking operations in Korea, suspended share buybacks in Q4 2021 with less capital return capacity, and a more conservative assessment of PPNR growth prospects.

In the third quarter of 2021, 79 hedge funds monitored by Insider Monkey were long Citigroup Inc. (NYSE:C), down from 87 funds in the prior quarter. One of the leading Citigroup Inc. (NYSE:C) stakeholders as of Q3 is Eagle Capital Management, with 19.8 million shares worth $1.39 billion. 

Here is what Artisan Value Fund has to say about Citigroup Inc. (NYSE:C) in their Q4 2020 investor letter:

“We fully exited the position in Citigroup. Global financial services company Citigroup made a $900 million clerical error and received a public reprimand from federal regulators. This, after a decade focused on process control, information technology and risk systems, makes the error substantially more costly than just the $900 million mistake. Regulators believe the company’s risk management improvements have fallen short of expectations. To rectify the situation, a process and technology spending surge could negatively affect 2021-2022 profits by 10% to 20%. Trust and confidence are important in large financial institutions, and this incident combined with the CEO’s sudden retirement shook ours.”