10 Best Affordable Stocks Under $40 According to Short Sellers

3) UBS Group AG (NYSE:UBS)

Forward P/E Ratio as of 26 August: 20.79x

Share Price as of 26 August: $31.12

Number of Hedge Fund Holders: 33

Short % of Shares Outstanding (31 July 2024): 0.42%

UBS Group AG (NYSE:UBS) offers financial services to private, corporate, and institutional clients. It also provides investment, retail, corporate, and institutional banking, holistic wealth management planning, and asset management services.

The company demonstrated exceptional financial resilience in its latest results as the company outpaced earnings forecasts. In 2Q 2024, it posted an EPS of $0.34, surpassing the analysts’ expectations of $0.12.

This exhibits its successful execution of the post-Credit Suisse acquisition strategy. The company delivered a strong performance in its core businesses and remains on track with capital return plans, such as dividends and buybacks. UBS Group AG (NYSE:UBS) and Credit Suisse have wrapped up their merger after more than a year, finally bringing an end to the discussions.

The merger of the parent banks is an important milestone in facilitating the migration of clients onto UBS Group AG (NYSE:UBS)’s platforms. It should now unlock the next phase of cost, capital, funding, and tax benefits from 2H 2024.

Moving forward, the company plans to focus on cost reductions, which are expected to be driven by its focus on client account and platform migrations. UBS Group AG (NYSE:UBS) captured nearly half of its targeted gross cost savings and made strong progress in addressing the legacy legal issues. It plans to roll out new rates in its advisory services in 4Q 2024. The company anticipates lending balances outside the US to improve as and when rates come down. The wealth management segment in the US and expansion in retail banking in emerging markets should continue to act as tailwinds:

Notably, 4 equities research analysts gave a “Hold” rating on the shares of UBS Group AG (NYSE:UBS) and 3 analysts gave a “Buy” rating. As of the end of 2Q 2024, 33 out of 912 hedge funds tracked by Insider Monkey held stakes in the company.

Patient Capital Management, a value investing firm, released its fourth quarter 2023 investor letter and mentioned UBS Group AG (NYSE:UBS). Here is what the fund said:

“UBS Group AG (NYSE:UBS) is a name we opportunistically purchased following the banking crisis earlier in the year. UBS benefited from buying its largest local competitor, Credit Suisse, for an 80% discount from where it was trading before the crisis. We bought after the deal, believing the market’s myopic focus on short-term integration risks failed to properly value the attractive set of assets. While the stock has done well since then, we still believe it is underappreciating the long-term return potential of the business.”