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Citigroup Inc. Message Board

  • cchaker cchaker Feb 20, 2013 3:53 PM Flag

    Billionnaire Louis Bacon's Top Picks for 2013

    Louis Bacon manages over $15 billion in assets under management at his fund Moore Global, with the investor's personal wealth being about a tenth of that amount. We follow billionaires and hedge funds because the most popular stocks among these investors outperform the market (see the details here). Louis Bacon and his investment team recently revealed their holdings in a regulatory filing for the fourth quarter of 2012, disclosing many of their long U.S. equity positions as of the end of December (and therefore the beginning of 2013). We have gone through the filing seeking to provide information to investors who are interested in doing more research on Bacon's recommendations to see if they are good fits for their own portfolio. Read on for our quick take on Moore's five largest stock holdings by market value and compare them to previous filings.
    The fund's top pick was JPMorgan Chase & Co. (JPM).
    Moore owned 4.7 million shares of Citigroup Inc. (C), down slightly from what it had reported for the end of September. In book terms the bank looks cheap at a P/B of 0.7, as investors express skepticism about the quality of Citigroup's assets and management. The trailing earnings multiple is quite high, and even with the bank expected to improve in the coming years the forward P/E of 8 is not much lower than at its peers. Citi did experience high earnings growth in the fourth quarter of 2012 versus a year earlier, but performance on the top line was much more modest. Bacon and his team did buy Bank of America Corp (BAC) during the quarter, closing December with a total of nearly 12 million shares in their portfolio. Bank of America is an even more extreme case of "cheap but performing poorly" than Citi, with a discount to book value of about 40% both with large decreases in both revenue and earnings between Q4 2011 and last quarter. Revenue, for example, fell 25%. As a result we would be concerned about Bank of America right now - it certainly has value prospects

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