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LivestreamMenu(This is The Best Stocks in the Market , brought to you by Josh Brown and Sean Russo of Ritholtz Wealth Management.) Josh — Sometimes the Best Stocks in the Market start out as ugly ducklings. One of the reasons we start our work for this column with price versus any other metric is that we don’t want to let our biases infect our ability to spot opportunities. We treat every stock that makes the list equally, regardless of how much money has been made or lost in a name or how treacherous its history has been for shareholders. Citigroup (C) is a great case in point. As Sean will show, this had been one of the ugliest ducklings in the pond for a very long time. But things have changed and we don’t dwell on the past. So what changed? Citi finally found an executive who knew what was wrong and what the situation called for: Amputation. Twenty years ago, Citigroup was drowning. The financial crisis exposed a bank that had grown into an unmanageable financial supermarket, stuffed with businesses nobody could properly oversee, and it took a $45 billion government bailout just to keep the doors open. What followed was two decades that can be summed up in one word: cutting. Jane Fraser had a front row seat to all of it, and then some. She joined Citi in 2004, and by 2008 she was running global strategy and M & A, the desk responsible for finding ways to shrink the bank fast enough to survive. In 18 months she executed 25 deals, sold off close to a trillion dollars of assets, and helped trim a workforce that eventually fell from 375,000 employees to roughly 261,000. Vikram Pandit, and then Michael Corbat after him, spent the rest of the 2010s finishing that work: unwinding Citi Holdings, the internal unit built to house the crisis-era toxic assets, and divesting more than 40 businesses before the bank finally shut it down in 2016. Progress came slowly, and for most of that stretch the market never fully bought into the story. Fraser became CEO in March 2021, the first woman to ever run a major Wall Street bank, and effectively inherited the assignment she’d started nearly 15 years earlier as a young deal maker. This time she wasn’t just cutting to survive. She was cutting to decide what Citi should become. Today’s version of Citi is sleeker, streamlined and significantly more profitable. It’s no surprise that the technicals are lining up with this fundamental improvement if you buy into the Best Stocks premise. The stocks we write up here do not fall into our laps by accident. Great turnarounds beget substantial uptrends. Let’s take a look at Citi today… DISCLOSURE: We currently own shares of C for clients in our Porterhouse strategy. Best Stock Spotlight: Citigroup, Inc. (C) Sean — Citi is a globally diversified bank built around five businesses, Services (treasury and trade solutions for multinational corporates, which is ranked #1 globally), Markets, Banking, Wealth and U.S. Personal Banking. Services are the franchise analysts care about most. It’s the plumbing of global commerce and Citi runs more of it than anyone. The stock has been the best performer among the big banks and it isn’t close. Citi is up 64.3% over the past year through July 7, versus 33.8% for PNC, 25.7% for Bank of America, 18.4% for JPMorgan and 8.2% for Wells Fargo. It returned 70.4% in 2025 and is up another 21.8% year to date. This thing has been on fire. But zoom out and things take a turn. Citi’s 20-year annualized return is -4%, the only negative number in the peer group mentioned over that time period. This was dead money for two decades because of the GFC but we are in the midst of a turnaround, which is how it landed on our list. The story behind Citi’s turnaround in price is based upon its multi-billion-dollar overhaul of the bank’s tech, infrastructure and CEO Jane Fraser’s broader restructuring. Citi exited more than a dozen international consumer businesses, flattened the org chart and cut layers of management. We are seeing the payoff in the fundamentals. Q1 revenue came in at $24.6 billion, up 14% year over year, an acceleration from low-single-digit growth in 2024 with net income of $5.8 billion and EPS of $3.06. It was the firm’s best quarterly revenue in a decade and a 56% jump in EPS from a year ago. Citi also bought back $6.3 billion of stock in Q1, a record for any single quarter. Citi just announced a new multi-year $30 billion buyback program at its May Investor Day and it raised the yield after clearing this year’s stress test, paying a 1.7% dividend. Quarter to quarter results could be lumpy given macro uncertainty and trading’s seasonal strength in Q1, so management cautioned against annualizing the strong start. Regardless, the longer-term targets from May’s Investor Day all point the same direction — profits rising through 2027 and 2028 as spending winds down and buybacks shrink the share count. The next big test comes soon as Citi reports Q2 earnings next Tuesday, July 14, alongside most of the big banks to kick off Q2 earnings season. Consensus expects $23.6B in revenue up 9% year over year and $2.71 in EPS up 33% year over year. Risk management Josh — Citigroup (C) has spent the past year climbing in stages, moving from around $85 last August to a high near $148 in June before the current pullback to $137. The advance wasn’t a straight line. A sharp push above $120 in January reversed hard, and the stock spent February and March carving out a base in the $105 to $115 area, testing that zone more than once before buyers stepped back in. That base became a foundation for the second leg higher, a steadier climb through April and May that carried price to new highs. The next test is reclaiming the June peak near $148, and that test arrives fast, with second-quarter earnings due next week. The stock has swung hard in both directions on earnings day under Fraser, jumping toward an 18-year high after April’s beat on record dealmaking activity but dropping 4% in January when a soft headline revenue number overshadowed otherwise strong investment banking results. The next report could produce a noisy response once again so we’re focused on the levels. Let’s start with momentum. 14-day RSI sits at 48, right at the midpoint after cooling off from elevated readings during the June run to new highs. The RSI made a similar round trip in January, spiking into that month’s high before working off the excess through the February and March base, and the stock emerged from that base with more strength than it carried in. A pullback to neutral readings after an extended advance is typical digestion following a strong move. Don’t let the 4-handle on relative strength fool you. Traders and investors should both anchor to the 200-day moving average, now around $116. This trendline has been respected the entire way up, as you can see above. It also lines up closely with the base Citi carved out between February and March, so a break of that zone would mark a real change in the stock’s character. Two visits to that $105 to $115 area last winter made it the level that matters, and it’s the one to watch if this pullback extends. Above $115 you’d rather be long than out. All opinions expressed by the CNBC Pro contributors are solely their opinions and do not reflect the opinions of CNBC, or its parent company or affiliates, and may have been previously disseminated by them on television, radio, internet or another medium. THIS CONTENT IS PROVIDED FOR INFORMATIONAL PURPOSES ONLY AND DOES NOT CONSTITUTE FINANCIAL, INVESTMENT, TAX OR LEGAL ADVICE OR A RECOMMENDATION TO BUY ANY SECURITY OR OTHER FINANCIAL ASSET. THE CONTENT IS GENERAL IN NATURE AND DOES NOT REFLECT ANY INDIVIDUAL’S UNIQUE PERSONAL CIRCUMSTANCES. THE ABOVE CONTENT MIGHT NOT BE SUITABLE FOR YOUR PARTICULAR CIRCUMSTANCES. BEFORE MAKING ANY FINANCIAL DECISIONS, YOU SHOULD STRONGLY CONSIDER SEEKING ADVICE FROM YOUR OWN FINANCIAL OR INVESTMENT ADVISOR. Click here for the full disclaimer.Read More
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