Citigroup stomps expectations
Tha bank wins Wall Street's earnings game this quarter, but is it strong enough to invest in yet?
While this is definitely good news for the bank, Citigroup hasn't had an easy time of things lately. In this year's round of banking stress tests conducted by the Federal Reserve, Citigroup passed in terms of its capital ratios, but the Fed came down hard on the bank for its approach to managing risk, and denied the bank's requests to return more capital to shareholders in the form of dividends and share buybacks.
So is the boost Monday a sign that Citigroup is back on the right track?
In this video from Monday's Stock of the Day, Motley Fool analyst Jamal Carnette says he's still staying away.
Jamal sums up the business of banking, saying that banks quantify and price risk accordingly. Since the Federal Reserve still believes that Citigroup is doing a poor job of that, Jamal sees several other more attractive buys in the sector, that he highlights in the video.
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Hedge funds' capital raising is causing all kinds of cascading destruction in the go-go names.
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