Out Fox The $treet

Citigroup passed the Fed stress test with flying colors. The large financial should announce a massive increase to capital returns this week. The stock remains cheap trading below tangible book value. Since last discussing the expectations for capital returns and specifically a dividend hike at  Citigroup  ( C ), the CFO provided some further details on expectations and the Fed stress tests results were released. The data points pivot towards some big capital return plans. Read the full article at Seeking Alpha.  Disclosure: Long C. Please review the disclaimer page for more details. 

Citigroup passes the 2016 stress test with flying colors. The bank stock took a huge hit due to Brexit. The bank is perfectly aligned to announce a big capital return increase as the stock hits recent lows. Despite strong CCAR results,  Citigroup  (NYSE: C ) ended down over 9% and is trading near recent lows around $40 due to Brexit. In essence, the bank is doing what it can but external events continue hammering the stock whether justified or not. Read the full article on Seeking Alpha.  Disclosure: Long C

Summary Goldman Sachs had to resubmit the capital return plan, leaving a lot unknown about the approved stock buyback plan. The investment bank hiked the dividend by $0.05 to a yield of 1.4%. Investors should pay less attention to the stock buyback plan and more attention to the cheap valuation. Of all the major financial institutions, Goldman Sachs (NYSE: GS ) is the one that doesn't disclose the stock buyback plan approved after the Comprehensive Capital Analysis and Review, or CCAR. Though passing the stress test, the investment bank had to revise its capital return plan, leaving most analysts questioning whether it will reduce the stock repurchase amounts of the last couple of years. Read the full article at Seeking Alpha. Disclosure: No positions mentioned. Please review the disclaimer page for more details. 

Summary Citigroup submitted a surprisingly large capital return plan that met no objections from the Fed. The results show the other large financial institutions requiring adjusted capital return plans. Previous recommendation to own the stock remains intact. For a very beleaguered bank, Citigroup (NYSE: C ) passed the Fed stress tests with flying colors. Considering the failure last year and the executive jobs on the line, the opinion all along was that the bank would easily pass the test this year. The surprise is the size of the capital returns approved and the struggles of the other leading financial institutions. Read the full article on Seeking Alpha. Disclosure: Long C. Please review the disclaimer page for more details. 

Summary BoA passed the Fed stress test, setting up increased capital return. The CCAR due to be released on the 11th has an overstated importance. Investors should use the weakness in the stock to load up based on valuation and not any capital return plan that is not needed to justify value. The stress tests and corresponding CCAR, or Comprehensive Capital Analysis and Review, plans are peculiar events created out of the financial crisis. Sure, banks and the Fed need to understand the impacts of adverse economic events on capital levels, but the results under crazy scenarios unlikely to occur in our lifetime again aren't impacting actual bank results. Read the full article on Seeking Alpha. Disclosure: No position mentioned. Please review the disclaimer page for more details.