Repost: Sandler O'Neill & Partners: "Why Citigroup Is Still a Buy" (C)

A couple of our weekend posts are not displaying correctly in some browsers. We'll try again. From Saturday:

The stock closed down 3 cents on Friday, at $4.27.
From Barron's Hot Research:

The banking giant's international consumer business is surging.
Citigroup (C: NYSE)

By Sandler O'Neill & Partners ($4.19, Nov. 18, 2010)
CITIGROUP REMAINS A CHEAP stock despite significant year-to-date outperformance.
Despite being up 27% year-to-date versus a 4% increase in the S&P Banking Index, Citigroup (ticker: C) is still trading at 0.9 times current tangible book value (TBV) and 0.8 times our 2011 TBV estimate of $5.21 per share.

[We rate Citigroup at Buy with a 12-month price target of $5.50.]

TBV is real, capital levels are strong, and both continue to grow. We continue to see significant excess risk-based capital generation potential despite increased Basel III requirements and expect a $3.8 billion TBV boost from Abu Dhabi share issuance in 2011.

Citigroup's international consumer business continues to grow and should command a premium valuation. Citigroup's Emerging Market Consumer Bank is large ($3.1 billion year-to-date net income), profitable (26% net margin), and growing (11% year-to-date loan growth).

Don't mistake management's theme of "leverage the global platform" as the same old song and dance. While not a new strategic theme, there is a new management team working on execution, and evidence to date suggests it is delivering.

Institutional under-ownership creates a large incremental buyer. Recent 13-F filings show that institutional ownership has doubled year-to-date but remains very low relative to peers and still leaves more than sufficient institutional net buying capacity to absorb remaining U.S. Treasury share sales.
-- Jeff Harte
-- Ted Holzman  

Also at Hot Research:

November 18
Mattel's Surge May Settle Down
November 17
Williams-Sonoma Is Cooking