Grab Global Diversification with an Unloved International Play

Investors tend to suffer from a “home country” bias. They tend to overweight positions in assets located in their own country, and fail to sufficiently diversify internationally.

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  • There are plenty of markets that offer better values than the U.S. market, even adjusting for political and currency risks. And in those markets are plenty of industry-leading companies that can provide great returns for patient investors. Especially those who buy unloved sectors.

    One simple place to start internationally is with UBS Group (UBS). The Swiss-based international bank just reported a record profit, even after dealing with the costs of integrating the assets of troubled Credit Suisse.

    While shares have rebounded 64 percent in the past year, there’s more upside as shares trade for less than 15 times earnings. Profitability has slowed over the last year, and will likely be weighed down by the Credit Suisse transaction, but over time, the buy will allow the bank to reach new highs.

    Action to take: Investors may like shares at current prices or on any future drop as an international holding. Shares currently yield about 2.2 percent.

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  • For traders, shares are in a strong uptrend. The January 2024 $27.50 calls, last going for about $1.50, could leverage further upside into high-double-digit returns.


    Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any of the companies mentioned in this article.