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Why Are These 3 Stocks So Darn Cheap?

By David Hanson and Matt Koppenheffer – Jan 25, 2014 at 3:00PM

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Bank of America, Citigroup, and AIG all trade below book value. Why?

Bank of America (BAC 0.83%), Citigroup (C -1.47%), and AIG (AIG -0.47%) have all crushed the market over the past year or so, but all three still trade below book value. What causes a stock to trade below book value? In this segment from The Motley Fool's everything-financials show, Where the Money Is, banking analysts David Hanson and Matt Koppenheffer take a question from their mailbag about this issue and tell viewers which of these three stocks they like the best.

David Hanson owns shares of American International Group. Matt Koppenheffer owns shares of American International Group, Bank of America, and Citigroup. The Motley Fool recommends American International Group and Bank of America. The Motley Fool owns shares of American International Group, Bank of America, and Citigroup and has the following options: long January 2016 $30 calls on American International Group. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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