Jim Cramer breaks down why it's illogical to sell the bank's stock but emotionally very hard to own.
CNBC's Jim Cramer on Wednesday explained why his charitable trust owns the stock of Citigroup, which is down about 11 percent in the last year and a far cry from its all-time highs in the $500 range last decade.
Cramer also pointed out that Keycorp, the parent of Keybank, has a safe dividend, higher yield, and same earnings multiple as Citigroup. With 1,100 branches in 15 states, Keycopr would make a compelling case for an acquisition, but no major bank or hedge funds have shown willingness to buy because some long-term interest rates have fallen below short-term interest rates, he said.
Cramer noted that there was weakness particularly in the Nasdaq as big institutions reconsider their stock allocations with the looming Lyft IPO. CEO Manny Chirico told the host that he promised the company would learn from its mistakes and not make them again. The host noted that investors have begun selling off health care stocks, along with a range of other securities. Health insurer shares also tumbled on Tuesday after the Trump administration began making moves that seek to get rid of the remaining parts of the Affordable Care Act.Paychex, the payroll and human resource outsourcing business, delivered an earnings beat and met revenue expectations in its quarterly report on Wednesday.
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