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These stocks aren’t done falling

Citigroup (C)

Let’s start with the obvious problem: Citigroup’s revenue has fallen over the past five years from $69 billion in 2013 to $64 billion in 2017. Some analysts see some improvement in 2018, but still only low single-digit growth. Compounding the problem, the company’s efficiency ratio fell from 59.3% in Q4 2016 to 58% in Q4 2017. In some ways these problems are the natural result of Citigroup’s having made the wrong long-term bets. Its Citi-Cards, which are tied to major retailers, have been in a general slump for years because retail has been in a slump for years. Also, the company’s huge investments in Mexico, South, and Central America haven’t turned into the El Dorado it was hoping for. Unfortunately for Citigroup, these trends are likely to stay in place for a while, and it could take years for the company to change direction, even if it knew exactly which direction it wanted to go in.

C

Chart courtesy of www.stockcharts.com

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Julian Close

Julian Close became a stockbroker in 1995. In his 20 years of market experience, he has seen all market conditions and written about every aspect of investing. Julian has also written extensively on corporate best practices and even written reports for the United Nations. He graduated from Davidson College in 1993 and received a Master of Arts in Teaching from Mary Baldwin College in 2011. You can see closing trades for all Julian's long and short positions and track his long term performance via twitter: @JulianClose_MIC.