The Wall Street Journal reports that Berkshire Hathaway (BRK.B) is part of a consortium that could bid around $8 billion for Citigroup's (C) consumer lending business, OneMain Financial. The consortium also includes Centerbridge Partners and Leucadia National (LUK). All of these firms have sterling investment records, but it is obviously Berkshire Hathaway's interest that should raise investor interest.
But based on Warren Buffett's investment record, maybe the financial community should not be shocked to see him pouncing on assets of a distressed company. And make no mistake, with a price/book of 0.73 and a forward P/E of 8.03, Citigroup is a distressed stock. Right or wrong, the market is not giving the mega-bank credit for Citigroup's diversity of services, large domestic deposit base and true global reach. While Buffett is not buying Citigroup outright, his interest in a meaningful portion of the company should alert market watchers to a potential opportunity, especially when you consider that many smart money investors own large Citigroup stakes…
Find out more at http://seekingalpha.com/article/278281-is-berkshire-hathaway-s-bid-evidence-that-mega-banks-are-undervalued
No comments:
Post a Comment