David Einhorn on CIT Group
Einhorn discussed what he considers to be the cheapest stocks at the 2016 Great Investors’ Best Ideas (or GIBI) Investment Symposium in Dallas on Tuesday, October 18, 2016. CIT Group (CIT) made his list of cheapest stocks. According to him, this stock hasn’t performed so well in the past two years, but it has the potential to provide good returns in the future.
The company provides banking services to both individual and commercial customers. It mainly operates in the lending, residential mortgage loans, and deposit segments and has a great position in North America (QQQ) (SPY) (VFINX) (IWM). The company’s 3Q16 earnings results didn’t meet market expectations. Markets expected earnings of $0.79 per share, while the company posted $0.65 per share. The stock fell nearly 1.5% after its earnings announcement. Worse-than-expected earnings and the company’s rising non-accrual loans are the major reasons behind the fall in the stock’s price.
CIT Group’s performance
CIT Group is currently trading at $36.10. Its 52-week high is $44.95, and its 52-week low is $25.19. It’s currently trading at a price-to-earnings multiple of 7.21x. On a year-to-date basis, the stock returned -8.7%. Over a two-year time period, the stock returned -25.7%, and over a five-year time period, the stock returned 2.4%. Currently, the stock is trading on par with its 100-day moving average and its 20-day moving average.
In the next part of this series, we’ll analyze David Einhorn’s view on Mylan.