XLF, Banking and Financial Sector Stocks: Citigroup and the future

» SteveT - Citigroup and the future

Anyone beside me own Citigroup? I am not the most qualified to comment on the spinoff and if the numbers make sense. I have owned Citigroup/Citicorp going back to 1990. I feel they have always had some of the strongest management bar none. This opinion has not changed after the 1998 merger and subsequent take over of Sandy Weill. In fact he maybe the best yet for shareholders, employees may give you the opposite opinion. Sandy is well known when it comes to cutting costs and one of the first places he looks to cut them is from labor. I know he has lost some good people because of this but on the other hand they seem to have an eager pool of up and comers ready to show what they can do. I know some changes in compensation and benefits are planned for next year and this will reduce costs.

From what I have read Citigroup is expected to use the money from the deal to go shopping for other profitable businesses. Weather they can do so is another matter. One thing I have come to realize about Sandy is he always comes out on top of any deal he makes. It would not surprise me if he has some uses for the money in mind. I am not sure how much longer Sandy is planning on staying on as CEO, but as I see it he is the type that would like to go out on top and with just one more deal under his belt. My gut tells me as the economy starts to grow next year and earnings increase if the P/E will also rise Sandy will step down about the time the stock price is at an all time high. Anyone have some ideas on what he may be looking at buying? The credit card business and brokerage are among the consistently profitable arms of the business, my guess is it will one or both of them.

-- posted by SteveT