Who is Buying Citi at 0.5x Tangible Book Value?

This one seems like a solid bet to me. Understanding it isn't exactly a growth machine at present, 0.5x TBV seems like a pretty compelling opportunity to buy the book regardless. 

What's the bear case against this? Any other deep value plays you like better? 

 

I've thought for the past 5 years that they have been cheap or undervalued on a typical BV or TBV basis, however, that has not lead to any sort of outperformance compared to their peers. I'm not saying that the restructuring will have a positive effect on the stock, just that you might be waiting for something that never comes, and perhaps buying another bank with a deserving premium can deliver more upside. Happy to hear other thoughts on this since this has been on my watchlist for a while but I've thankfully never pulled the trigger.

 

Value vs. Growth in a nutshell. I have an affinity for Shit Stocks so you know where I come out. As I like to say - Shit floats!!!

 
Most Helpful

The case against Citi is: 1) they failed to bend the expense curve and have actually seen increasing expenses - management says that they expect the cost curve to bend in the next 6 quarters, but that's already been pushed out 2) industry lagging ROTCE which is highly correlated with P/TBV, 3) outside of TTS, no truly market leading components leading to the firm, having a very low moat, and 4) execution risk associated with winding down the legacy businesses - costs maybe materially higher than expected. 

 

Accusamus laborum labore vel nisi porro iusto dolore. Possimus numquam sint omnis eligendi nemo. Iusto beatae est aspernatur ut.

Career Advancement Opportunities

May 2024 Investment Banking

  • Jefferies & Company 02 99.4%
  • Lazard Freres No 98.8%
  • Harris Williams & Co. 25 98.3%
  • Goldman Sachs 17 97.7%
  • JPMorgan Chase 04 97.1%

Overall Employee Satisfaction

May 2024 Investment Banking

  • Harris Williams & Co. 18 99.4%
  • JPMorgan Chase 10 98.8%
  • Lazard Freres 05 98.3%
  • Morgan Stanley 07 97.7%
  • William Blair 03 97.1%

Professional Growth Opportunities

May 2024 Investment Banking

  • Lazard Freres 01 99.4%
  • Jefferies & Company 02 98.8%
  • Goldman Sachs 17 98.3%
  • Moelis & Company 07 97.7%
  • JPMorgan Chase 05 97.1%

Total Avg Compensation

May 2024 Investment Banking

  • Director/MD (5) $648
  • Vice President (21) $373
  • Associates (91) $259
  • 3rd+ Year Analyst (14) $181
  • Intern/Summer Associate (33) $170
  • 2nd Year Analyst (68) $168
  • 1st Year Analyst (205) $159
  • Intern/Summer Analyst (146) $101
notes
16 IB Interviews Notes

“... there’s no excuse to not take advantage of the resources out there available to you. Best value for your $ are the...”

Leaderboard

1
redever's picture
redever
99.2
2
Secyh62's picture
Secyh62
99.0
3
Betsy Massar's picture
Betsy Massar
99.0
4
BankonBanking's picture
BankonBanking
99.0
5
CompBanker's picture
CompBanker
98.9
6
dosk17's picture
dosk17
98.9
7
GameTheory's picture
GameTheory
98.9
8
kanon's picture
kanon
98.9
9
DrApeman's picture
DrApeman
98.8
10
bolo up's picture
bolo up
98.8
success
From 10 rejections to 1 dream investment banking internship

“... I believe it was the single biggest reason why I ended up with an offer...”