Citigroup Inc. (C)

An underperformer for years. He owns a few US banks, but not this one. This is still struggling on the execution front. Morgan Stanley performs better.

(A Top Pick March 9/17, Up 24%) Trading at just above 1x book-to-price value. Dividend of 1.7% will likely climb and/or continual share buybacks for the next few years. Will be $60 billion of capital returns to shareholders. A lighter regulatory environoment will help. Their global presence (i.e. Latin America) distinguishes them from other American banks, like Bank of America. 50% of revenues come overseas.

(A Top Pick Feb 6/17 Up 35%). He loves this company and has a big position, buying after the US federal election. The US financials are starting to make interest spreads again. Higher interest rates will be a major positive and they are promising dividend increases. They only pay out 20% of earnings in dividends and thinks the dividend could be increased. Yield 1.7%. (Analysts’ price target is $83.85 )

He loves this company and has a big position, buying after the US federal election. The US financials are starting to make interest spreads again. Higher interest rates will be a major positive and they are promising dividend increases. Yield 1.7%. (Analysts’ price target is $83.85 )

This has been doing quite well. The RSI indicates it is in overbought territory, similar to all the major US financials. A good idea would be to either trim a little, or use a very simple defensive tool like a 10 or 20 day moving average with a trailing stop.

US banks don't really have a stronger competitive advantage, simply because there are a smaller number of Canadian banks. Given that you are exposed to currency risk, he would favour Canadian banks. We are probably 18-24 months away from the next recession, and banks normally don't do well in that kind of environment. However, this is a relatively good franchise if you do want an American bank.

(A Top Pick Jan 5/17. Up 28%.) He would continue owning this. Thinks it goes substantially higher. Their earnings are coming out on Tuesday

Too big to fail. If it went to the same valuation as Bank of America (BAC-N), it would be over $100 a share. It’s trading right on its model price. Mean estimates for 2018 are $6.16. Earnings come out on Tuesday, and he expects there will be a lot of good news. There is a chance of doubling the dividend. Dividend yield of 1.6%. (Analysts' price target is $82.)

US banks are like the Canadian banks in that there is not a lot not to like. Technically they look great. Because the markets are where they are, there is no reason not to be part of it.

Bought this as a money centred bank and thinks it is an excellent opportunity from a valuation standpoint. It’s going into a more mature valuation similar to the other banks. Dividend yield of 1.7%. (Analysts' price target is $78.50.)

Has done extremely well. They benefited from a number of different things, including rising rates in the states, but they are also well exposed heavily; more so that the other banks, to international markets, approximately 45% of their earnings. That’s good and bad. Last year in 2017 it actually outperformed at lot of the other banks. Seasonal periods for banks last until April. It’s performing well. From a fundamental perspective, though, US dollars tends to pick up in January. If we see stronger US dollars in January and February, you might see this bank underperform against the other banks because of its emerging markets exposure. Citigroup is fine. Just watch it and the US dollar as well.

WFC-N has been in the news recently with sales practices. C-N is still in line with JPM-N, which is the best in breed. C-N is more emerging markets. You eventually have to choose.

Trading at less than 1X BV, so it’s one of the cheaper US financials. Tax reform and rising interest rates, are going to help banks. Dividend yield of 1.7% is going to go higher. 40% of revenues come from outside of developed markets, and 40% is coming from emerging markets.

There is still fear coming out of the 08-09 financial crisis. Every quarter the company keeps building on their BV and improving their ROE. They are beyond the point where they are worried about troubled assets. Just had an investors day, which they hadn't hosted in a number of years. It was coming out to the market saying they had really turned the corner. Have set a very achievable target of $9 per share in earnings by 2020, well above today’s $5.25. Thinks the stock continues to grind higher as they move towards their plan.

Banks are levered by about 10 to 1. In the heydays of 2007, they were levered over 30 to 1, which is why many of them collapsed. A 10 to 1 leverage is a lot of leverage. They are good as long as the depositors don’t pull out the deposits. This bank is not back to where it was. They did a huge reverse split. He would suggest risk-adverse clients stay away from banks.