Original Post on The Sun's Financial Diary

Is Citi Stock A Buy Now?

I heard the news this morning that Citigroup CEO Vikram Pandit bought 750,000 shares of Citi stock (C) on the open market yesterday when the share price dropped below $9. In addition to CEO Pandit, other three executives also bought a total of 550,000 shares. Is this the sign of confidence?

Currently trading slightly above $9 per share, Citi stock has been hit very hard after the world’s biggest bank by revenue had to write-down billions of bad loans. Since the credit crisis began more than a year ago, Citigroup has lost at least $13 billion (Times online) and slashed tens of thousands of jobs (Citi announced it’s cutting another 10,000 works worldwide). Comparing to its major rivals, Bank of America (BAC) and JPMortgan Chase (JPM), Citi stock has the worst one-year performance, down more than 70%.

When I looked at the bank dividend yield nearly half a year ago, Citi was pretty impressive when the stock was traded twice as much higher as its current price. The dividend yield, 6.60% at $0.64 per share, is till very good (as long as they don’t cut it). At least that’s a little bit comforting for owning the stock (Why? If you reinvest the dividend instead of taking cash distribution, you can buy more shares when the price is low and you will be rewarded if the stock recovers later).

So, do you think Citi stock is a buy at the present price level? Or you want to wait a little bit to get into the banking sector?

Though I am getting into Citi, I am still making my monthly purchase of Bank of America stock via its DRIP program.