10 Best Affordable Stocks Under $40 According to Short Sellers

1) Sumitomo Mitsui Financial Group, Inc. (NYSE:SMFG)

Forward P/E Ratio as of 26 August: 11.78x

Share Price as of 26 August: $13.34

Number of Hedge Fund Holders: 13

Short % of Shares Outstanding (31 July 2024): 0.07%

Sumitomo Mitsui Financial Group, Inc. (NYSE:SMFG) is engaged in managing financial operations for its subsidiaries. It offers commercial banking and a variety of financial services.

Sumitomo Mitsui Financial Group, Inc. (NYSE:SMFG) is now focusing on strengthening its wealth management arm, which is in sync with Japan’s rapidly aging population. The company also possesses improved profitability metrics, such as an ROE target of 9% by FY 2029. Therefore, the company is not only a strong dividend payer, but also has strong growth prospects. It pays a healthy dividend yield of over ~2.5%.

Sumitomo Mitsui Financial Group, Inc. (NYSE:SMFG) maintains a strong focus on retail customers and small and medium-sized enterprises rather than large and well-established corporate clients. This should continue to help it in generating higher average asset yield in Japan. It has strengths in the consumer finance business, where the company owns 100% of Promise business, and in credit cards.

Sumitomo Mitsui Financial Group, Inc. (NYSE:SMFG)’s strong alliances and partnerships with several other financial institutions are expected to act as primary tailwinds. It has established valuable partnerships with multiple global financial entities. These should help in enhancing its market reach and capabilities. For example, Jefferies Financial Group Inc. (NYSE:JEF) and SMBC Group announced that they have expanded their global strategic alliance to exploit future corporate and investment banking business opportunities in the Canadian market.

While we acknowledge the potential of SMFG as an investment, our conviction lies in the belief that some deeply undervalued AI stocks hold greater promise for delivering higher returns, and doing so within a shorter timeframe. If you are looking for a deeply undervalued AI stock that is more promising than NVDA but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.

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