01. UBS Group AG (NYSE:UBS)
Number of Hedge Fund Holders: 33
Topping our list of seven best European bank stocks to invest in is UBS Group AG (NYSE:UBS). UBS Group AG (NYSE:UBS) showcases exceptional financial resilience with its latest results, significantly exceeding earnings forecasts. Reporting an EPS of $0.34, UBS has surpassed the expected $0.12, highlighting the successful execution of its post-Credit Suisse acquisition strategy. Under CEO Sergio Ermotti’s leadership, the firm achieved a net profit of $2.9 billion in the first half of the year, with an underlying return on CET1 capital of 9.2%.
UBS Group AG (NYSE:UBS) effective integration efforts have realized nearly half of its targeted cost savings, while the CET1 ratio remains robust at 14.9%. The bank’s strong performance is bolstered by substantial net new asset inflows totaling $127 billion. UBS Group AG (NYSE:UBS) has strategically reduced risk-weighted assets and streamlined operational expenses, maintaining a solid capital buffer. Despite prevailing market uncertainties, UBS’s client-centric approach and disciplined risk management underpin its long-term financial targets, including ongoing dividends and share buybacks. This proactive strategy positions UBS Group AG (NYSE:UBS) strongly for sustained growth and stability in the financial sector.
In the second quarter of 2024, the number of hedge funds with stakes in UBS Group AG (NYSE:UBS) increased to 33 from 32 in the previous quarter, according to Insider Monkey’s database. The combined value of these stakes is approximately $2.43 billion. Christer Gardell And Lars Forberg’s Cevian Capital emerged as the largest stakeholder among these hedge funds during this period.
Patient Capital Management stated the following regarding UBS Group AG (NYSE:UBS) in its fourth quarter 2023 investor letter:
“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.”
While we acknowledge the potential for UBS to grow, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and doing so within a shorter timeframe. If you are looking for an 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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