ThePanelist.com - Watching Citigroup (C) Climb Made Me Buy Bank of America (BAC)

Watching Citigroup (C) Climb Made Me Buy Bank of America (BAC)

Written by David Neubert

Thursday, 17 May 2007

I own Citi and write about it often. Citigroup has been getting a lot of attention lately as shareholder activists try to unlock value. What stock is next?

I, and others, bought Citigroup (C - $55.05) because it has a p/e of 11, a yield near 4%, a solid consumer franchise, and a lot of smart bankers. What other bank fills that value and great franchise? Bank of America (BAC - $51.03). So yes, I just added to my B of A position at $51.04. I'll sit and collect my dividend. In the meantime, I wouldn't be suprised to see hedgies (hedge fund managers and other speculators) wake up and drive up Bank of America in sympathy with Citigroup as they look for similar plays.

Disclosure: I own Citigroup (C) and started buying back in 1990. I own Bank of America (BAC). I have banking relationship with both banks for business and personal reasons.

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