10 Most Undervalued US Stocks to Buy According to Hedge Funds

3. Citigroup Inc. (NYSE: C)

Forward P/E Ratio as of March 6: 9.67

Number of Hedge Fund Holders: 101

Citigroup Inc. (NYSE:C) is a financial services holding company that offers a spectrum of products and services to consumers, corporations, governments, and institutions worldwide. It operates through 5 key segments: Services, Markets, Banking, US Personal Banking, and Wealth Management.

Its Services division’s 2024 revenue was up 9% year-over-year to $19.6 billion. This growth stemmed from increased fee revenue, which was up 17%, and higher deposit volumes, despite a low-rate environment. The division gained market share in TTS (Trade and Treasury Solutions) and security services, boasting its best fourth quarter in a decade with 6% market growth. Services generated $1.9 billion in Q4 2024 net income and $6.5 billion for the full year.

For 2025, Citigroup Inc. (NYSE:C) expects continued non-interest revenue growth, driven by expansion with institutional and commercial clients. It aims to deepen relationships with asset managers through digital and data investments. Modest NII (Net Interest Income) growth is expected in 2025, fueled by higher deposit volumes. Repricing actions will offset potential rate headwinds.

Diamond Hill Capital Long-Short Fund stated the following regarding Citigroup Inc. (NYSE:C) in its first quarter 2024 investor letter:

“Other top Q1 contributors included Meta Platforms, Citigroup Inc. (NYSE:C) and Walt Disney. Banking and financial services company Citigroup’s restructuring efforts are ongoing, and it continues remediating regulatory issues and building capital in anticipation of increased requirements. The company expects to see expenses fall meaningfully in the second half of 2024, bolstering the outlook from here.”