20th May 2024

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Business Industry and Financial

Should You Hold Deutsche Bank Aktiengesellschaft (DB)?

Third Avenue Management, an investment management company based in New York City, released its “Value Fund” first quarter 2023 investor letter. A copy of the same can be downloaded here. The fund’s performance was favorable in the quarter, and it returned 8.68% in the first quarter compared to a 7.88% return for the MSCI World Index and a 1.12% return for the MSCI World Value Index. In addition, you can check the top 5 holdings of the fund to know its best picks in 2023.

Third Avenue Value Fund highlighted stocks Deutsche Bank Aktiengesellschaft (NYSE:DB) in the first quarter 2023 investor letter. Headquartered in Frankfurt am Main, Germany, Deutsche Bank Aktiengesellschaft (NYSE:DB) engages in the provision of corporate banking and investment services. On June 9, 2023, Deutsche Bank Aktiengesellschaft (NYSE:DB) stock closed at $10.61 per share. One-month return of Deutsche Bank Aktiengesellschaft (NYSE:DB) was 1.43%, and its shares gained 6.31% of their value over the last 52 weeks. Deutsche Bank Aktiengesellschaft (NYSE:DB) has a market capitalization of $21.585 billion.

Third Avenue Value Fund made the following comment about Deutsche Bank Aktiengesellschaft (NYSE:DB) in its first quarter 2023 investor letter:

“The largest detractors from Fund performance during the quarter included two banks, Comerica and Deutsche Bank Aktiengesellschaft (NYSE:DB). The Fund’s actual bank exposure at quarter end totaled 9.52% and is comprised of Bank of Ireland, Deutsche Bank and Comerica, in order of position size.

As it relates to Deutsche Bank (“DB”), we deem the current operating environment somewhat more difficult to gauge, primarily because of the nature of DB’s business lines. A significant portion of the business is comprised of various forms of investment banking in which it is critical that customers continue to have confidence in the bank as a strong and safe counterparty. The transactional daisy chain that runs from investment bank to investment bank, which has from time-to[1]time spread liquidity and solvency problems from investment bank to investment bank, is real and was brought back to the fore by growing fears over Credit Suisse’s solvency as clients fled in an accelerating trend. To date, it appears that DB has handled the turmoil well, maintained the confidence of its clients, and possibly even benefited on the margin with early reports of some additional client flows and hiring of former CS bankers. Had DB not spent the last several years improving its capital base, reducing leverage, reducing costs, exiting various business lines, laying past crises to rest, and improving controls, it is entirely possible that DB would be right alongside Credit Suisse on the front page of the financial news for all of the wrong reasons. Again, the situation continues to be fluid but DB’s ability to weather the turmoil to date, including some very peculiar activity in the credit default swap market that created some appearance of panic, strikes us as a testament to all of the heavy lifting done by DB’s management team in recent years.”

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Deutsche Bank Aktiengesellschaft (NYSE:DB) is not on our list of 30 Most Popular Stocks Among Hedge Funds. As per our database, 18 hedge fund portfolios held Deutsche Bank Aktiengesellschaft (NYSE:DB) at the end of first quarter 2023 which was 15 in the previous quarter.

We discussed Deutsche Bank Aktiengesellschaft (NYSE:DB) in another article and shared the list of best low-priced stocks to buy. In addition, please check out our hedge fund investor letters Q1 2023 page for more investor letters from hedge funds and other leading investors.


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Disclosure: None. This article is originally published at Insider Monkey.