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Author: mhirschey Big red star, 1000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 422  
Subject: Citigroup Buys USB at 60% Off! Date: 8/31/2000 9:04 PM
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fools:

For more than a decade, Citigroup and USB have been priced in a very similar fashion by the stock market.

Same business, same tight-fisted management, and so on.

Statistically, their stock prices have been very closely correlated. They move together.

To see this is the case, a picture might help:

http://finance.yahoo.com/q?s=usb&d=mym&c=c

All of this changed during the past year in which Citigroup is up 75% and USB is down 25%.

At today's close, Citigroup was priced at $58.39, or 22.9 times ttm earnings of $2.60.

At the same time, USB was priced at $21.77, or 10.13 times ttm earnings of $2.08.

With Citigroup dollars now worth $1.75, and USB having fallen in price to $.75 on the dollar, Citigroup can now buy USB
for only 40% of the share-per-share dollar price of one year ago.

This yawning gap will not persist.

Citigroup is going to buy a regional bank.

None is cheaper, nor better situated than USB.

You read it here first.

Best wishes,
Mark Hirschey
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