Citigroup Inc. (C)

Trading below BV. There are reasons why the US banks are not recovering the way most people thought they would. The difficulty is that the regulators are now in the business and it is difficult to know what they are going to be allowed to do and how they are going to be able to deploy their capital. (See Top Picks.)

(Top Pick April 18’13, Up 6.03%) They passed the stress test, but can’t hand out big dividends or do big buybacks. They have excess capital that they can’t return now, but at some point they can. She uses this as an opportunity to buy into the stock. It’s a pretty good value here.

Sector is beaten down. Poster child during financial crisis. It has been beaten down the most in the sector. Would look to build his position further.

Citigroup (C-N) or Bank of America (BAC-N)? Doesn’t own either one, but if she had to choose, it would be Bank of America. Of the 30 banks checked by the federal government, 5 were rejected and Citigroup was one of them. This bank pays you a dividend of $.04 per year and they can’t increase that nor can they buy back shares. She owns Wells Fargo (WFC-N) which has a yield of 2.4% and got approval to increase their dividend by 17%, and as well, increase their stock purchase plan for this year.

Failed the stress test, but the company is not worse off, it is just not returning capital to you today by raising their dividend. As a long-term investor, he would be buying this today because nothing has changed. It is going to benefit from an improving US economy, improving auto sales, home sales, etc.

(A Top Pick May 31/13. Down 4.12%.) The good news is that this continues to hang around here. We will get to hear what the fed has to say after the market closes tonight. Model price is $62, 24% above.

Failed the stress test. Gets a little bit worried that there is some lack of clarity in how the organization is executing. This has not been one of his favourite stocks. You have to remember that this is not a bank that is spread out through the US; it really is a bank in New York state. Has a great overseas franchise.

Would buy this on any discernible pullback. This is a name that is going higher over time.

Watching this very carefully. Likes that the more senior banks have sort of shown the way with what we are likely to see with this bank. This bank is making great efforts in getting rid of the toxic assets and really cleaning things up, and bringing them back to a more domestic focus. Trading at about 72% of BV. Pretty good-looking situation.

Doesn’t pay a yield, see Top Picks today.

(Market Call Minute) Loves them. Front a center for recovery because they are cheap.

He is bullish on US financials. Earnings are still relatively depressed with C-N. Should continue with 10-12% loan growth for the next few years.

Likes financial services. Developed markets are doing well while emerging markets are deteriorating in this sector. C-N is impacted by what is going on in South America. Prefers BAC-N.

A great name to hold. Valuations are very attractive at 9.2X forward earnings. This company has largely de-risked. 60% of its revenue, earnings, etc. come from outside of the US, primarily retail banking. You are looking at an improving situation in the US such as housing, litigation risks, etc.

Trading below book and holding a lot of capital. Thinks we are getting to the end of the process of dealing with bad assets. In the second half of the year they will not hold back earnings so much. Thinks you will get a dividend and a share buyback.