5 Cheapest Stocks in Warren Buffett’s Portfolio for 2024

3. Citigroup Inc. (NYSE:C)

Berkshire Hathaway’s Latest Investment: $2.27 Billion
Number of Hedge Fund Holders: 79
P/E Ratio: 8.18

Citigroup Inc. (NYSE:C) is one of the cheapest stocks in Warren Buffett’s portfolio for 2024 for anyone eyeing exposure in the financial services sector. As one of the largest banks in the US, Citigroup Inc. (NYSE:C) continues to take advantage of the high-interest rates in the aftermath of the Fed, hiking the benchmark rate to between 5.25% and 5.50%.

Citigroup Inc. (NYSE:C) has gained about 13% year to date. While trading with a price-to-earnings multiple of 8.18, it also rewards investors with a 4.04% dividend yield. Berkshire Hathaway held stakes worth $2.27 billion in Citigroup Inc. (NYSE:C) as of the end of Q3 2023.

Insider Monkey tracked 79 hedge funds that owned Citigroup Inc. (NYSE:C) shares at the end of Q3 2023, up from 75 in the previous quarter. Their holdings were worth almost $7 billion. 

Silver Beech Capital talked about Citigroup Inc. (NYSE:C) in its Q3 2023 letter. This is what it said:

“Citigroup (“Citi”) is a large-capitalization global diversified financial services holding company that primarily serves multinational institutional and high net worth consumer clients. Citi is one of three large American banks to be designated in “bucket 3 or 4” of the “global systemically important bank” (“G-SIB”) framework by The Basel Committee on Banking Supervision. The other banks in this group are J.P. Morgan and Bank of America.

As a G-SIB, Citi is subjected to increased regulatory supervision by global bank regulators and central banks. Enhanced regulatory supervision was an important post-crisis reform to strengthen the global financial system by increasing bank capital ratios, transparency, and decreasing risk-taking. These reforms resulted in the largest G-SIBs moving away from risk-oriented banking activities such as advisory, high-yield lending, and trading, towards lower-risk activities. Indeed, Citi’s most valuable, high-growth segment, Treasury and Trade Solutions, is in lower-risk and entrenched activities such as liquidity and cash management, payments, trade solutions, and automated receivables processing. In our view, somewhat unintuitively, Citi’s increased regulatory supervision contributes to the company’s less risky banking business model, and thus its attractiveness as a downside-oriented investment opportunity. (Click here to see the full text).

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