Citigroup fails inspection again
For the second time in three years, the Fed tells the bank that it isn't up to par and can't increase its dividend or initiate share buybacks.
The results of these tests determine whether or not banks will be allowed to raise dividends or initiate share buyback programs, and this year, the only big bank to fail was Citigroup (C). This is the second time in three years that the bank has failed.
The problem this year wasn't with Citigroup's liquidity. The bank's capital ratios fell well above the required benchmark. The problem was the bank's processes in place around its ability to forecast losses across all of the markets that Citigroup operates in. These processes domestically and internationally did not reach a level that the Fed decided was adequate.
But with shares as cheap as they are today, does this black eye make Citigroup a bank to stay away from, or is now a good time to buy? On Thursday's Stock of the Day, Motley Fool analyst David Hanson says he's definitely not staying away. Despite Citigroup's troubles, it remains the cheapest of the big banks today, and still trades at a discount to its tangible book value. David sees this as a bank that will definitely be in a better place than it is today five or ten years down the road.
The Motley Fool's 12 top stocks for 2014 are now available! So if you're tired of picking stocks out of a hat and hoping that one skyrockets, check out Stocks 2014: The Investor's Guide to the Year Ahead. It's The Motley Fool's current top report, and includes Chief Investment Officer Andy Cross's top stock for 2014! This under-the-radar company is the secret winner in the war for the last precious drops of oil on the planet. Find out what it is and how you can take advantage of this unseen company's huge profits in this special, free report, just click here now.
Copyright © 2014 Microsoft. All rights reserved.
Fundamental company data and historical chart data provided by Morningstar Inc. Real-time index quotes and delayed quotes supplied by Morningstar Inc. Quotes delayed by up to 15 minutes, except where indicated otherwise. Fund summary, fund performance and dividend data provided by Morningstar Inc. Analyst recommendations provided by Zacks Investment Research. StockScouter data provided by Verus Analytics. IPO data provided by Hoover's Inc. Index membership data provided by Morningstar Inc.
Chrysler, Honda and Toyota all count the family shuttles among their top-selling vehicles, while Kia is giving its new model a big push.
VIDEO ON MSN MONEY
Top Stocks provides analysis about the most noteworthy stocks in the market each day, combining some of the best content from around the MSN Money site and the rest of the Web.
Contributors include professional investors and journalists affiliated with MSN Money.
Follow us on Twitter @topstocksmsn.