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Citi, The Can’t Lose Trade Of 2010?

With both explicit and implied government support, should you gobble up shares of Citi ?

That’s the question many investors are pondering right now with Citi trading around $3 a share.

On the bearish side of that argument is the widely followed strategists Dick Bove. You might remember on December 16th he told Fast Money to stay away -- "I put a sell rating on the stock," he said. "I don't want to own this stock and I would not buy it."

That was largely on a belief that Citi was not focused on its core businesses.

However not everybody shares Bove's bearish outlook. On Monday’s Fast Money, Sandler O’Neil analyst Jeff Harte told us that “significant upside remains in Citi.”

Harte said, 1) the stock is cheap on price-to-tangible-book value, 2) the management team has been meaningfully upgraded and 3) Citi is becoming more transparent.

But most important - his bullish thesis stemmed from a belief that shares are under-owned by institutional investors.

Take a look at his findings.

Company Institutional Ownership
Bank of NY 78%
Goldman Sachs 77%
Morgan Stanley 74%
JPMorgan Chase 73%
Bank of America 64%
Citigroup 22%
Source: Sandler O'Neill

“Citi is still only 20% owned by institutional investors and I think in 2010 when those investors start looking for alpha they’re going to look at Citi. Shares could appreciate in a meaningful way,” Harte said. As a result Harte rated Citi shares a “Buy” with a $5.50 price target.

What do you think? We want to know!


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Trader disclosure: On Dec. 28th, 2009, the following stocks and commodities mentioned or intended to be mentioned on CNBC’s Fast Money were owned by the Fast Money traders

For Steve Grasso:
Grasso owns (AAPL)
Grasso Owns (BAC)
Grasso Owns (C)
Grasso Owns (CSCO)
Grasso Owns (PFE)
Grasso Owns (WMT)
Grasso Owns (V)
Stuart Frankel is Short (QQQQ)

For Steve Cortes:
Cortes Owns (GD)
Cortes Is Short (TOL)
Cortes Is Short (PHM)
Cortes Owns (SPX)
Cortes Owns US Dollar
Cortes Is Short Gold

For Pete Najarian:
Najarian Owns (LLTC) calls
Najarian Owns (MS) & Short (MS) Calls
Najarian Owns (PFE)
Najarian Owns (STEC) Call Spread

For Joe Terranova:
Terranova Works For (VRTS)
Terranova Is Chief Market Strategist Of Virtus Investment Partners, Ltd.

For Jeff Harte:
Sandler O'Neill Has Received Compensation from (C)
(C) Is A Client Of Sandler O'Neill

For Steve Levenson
Stifel, Nicolaus & Company, Inc. makes a market in the securities of (ALOG)
Stifel, Nicolaus & Company, Inc. expects to receive or intends to seek
compensation from (ALOG)
Stifel, Nicolaus & Company, Inc. makes a market in the securities of (ASEI)
Stifel, Nicolaus & Company, Inc. expects to receive or intends to seek
compensation from (ASEI)

For Tom Lydon
Lydon's Clients Own Shares of (TIP)
Lydon's Clients Owns Shares of (VWO)
Lydon's Clients Own Shares of (EEM)
Lydon's Clients Owns Shares of (GLD)

For Heath Terry
FBRCM acts as a market maker in (ATVI)
FBRCM acts as a market maker in (ERTS)
FBRCM acts as a market maker in (THQI)
FBRCM acts as a market maker in (TTWO)



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