Cramer on BloggingStocks: Buy Citi on the deal

Posted Dec 10th 2009 10:00AM by Jim Cramer
Filed under: Ford Motor (F), Citigroup Inc. (C), Wells Fargo (WFC), Stocks to Buy, Cramer on BloggingStocks

From TheStreet.com Network

TheStreet.com's Jim Cramer says this one'll make you a bundle by 2012.

Buy Citigroup (C) (Cramer's Take). No, not in the open market, but on the deal or deals, depending upon how heavy-handed the government's going to be.

I initially recommended this stock in the low $3s and saw it go to $5, where I begged the government nightly on my show to sell its 7 billion shares. But no, the government played the market and gave up a very big gain. But now here we are back again at $3 and change, and the government is going to price its stock, and the company might do an additional 6 billion shares or more to pay back TARP.

So you are looking at about 14 billion shares hitting the market.

While I can't claim that this one is going to be as good at the big Ford (F) (Cramer's Take) deal, I do believe that with only Wells Fargo (WFC) (Cramer's Take) as a holdout, you would be buying into the second-to-last large offering in the group, and that alone is very meaningful.

I think that Citigroup has the ability to earn a ton of money once the global economy moves into higher gear -- only 50% of its business is in America -- and the company has performed surprisingly well during this period of downsizing and endless heckling. There have been real staff reductions, real bonus reductions, real real estate deductions and a wiser culture put in.

This company's book value will be a dollar or more above where the deal comes, which is encouraging. The company's book of business of bad loans has peaked; I think that the Citi Holdings part of the equation is more seasoned and less "bad" than it was.

You buy it and you sit and wait for three years -- at the end of 2012 you should have $12.

Jim Cramer is co-founder and chairman of TheStreet.com. He contributes daily market commentary for TheStreet.com's sites and serves as an adviser to the company's CEO. At the time of publication, Cramer had no positions in the stocks mentioned.

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