This FTSE 250 share dived 13% last week. I’d buy it now!

As a long-term value investor, I often scour the FTSE 100 and FTSE 250 index for undervalued stocks.

Ideally, I’m looking for a good business whose stock trades at a low earnings multiple and offers a market-beating dividend yield. In the latest search of the mid-cap index, I found one cheap FTSE 250 stock hiding in plain sight.

240 years of business

My hidden treasure is an investment manager Group of People (LSE: EMG) — the world’s largest hedge-fund company.

Although the company uses highly sophisticated algorithms to trade securities globally, its origins date back to 1783. Indeed, the brokerage firm’s contract to supply rum to the Royal Navy ran from 1784 to 1970.

Over two centuries, Man became a major player in trading commodities such as sugar, rum, coffee and chocolate. This trading expertise eventually led the group to become a leading asset manager, using systematic trading strategies in the financial markets.

The group was listed in London in 1994 and in 2000 it split into private commodities trader ED&F Man and quoted financial company Man Group.

The London-based company currently employs more than 1,400 people worldwide. By the end of 2022, it managed assets worth $143.3bn (down 4% in a year) for a range of private and institutional investors.

Man Group shared slides

Earlier this year, these FTSE 250 stocks were soaring. Just over a month ago, it hit a five-year peak of 293.8p on March 3. Since then, the stock has fallen sharply, as the banking crisis has rocked global markets.

Last week alone, the stock fell almost 13%, making it the second worst performer in the FTSE 350 index. Here’s how the stock performed over eight different periods:

Current stock price	210.6 pp
A week	-13.0%
One month	-26.4%
Three months	-5.6%
six months	-8.0%
A year	-13.4%
Two years	+28.0%
Three years	+67.5%
five years	+20.5%

Looking at this table, I see two trends. First, Man Group shares have been weak in 2022-23, losing more than a quarter of their value in a month. Second, this stock produces positive returns over two, three and five years.

To me, this suggests that the £2.6bn company’s shares could fall victim to short-term selling weakness. But as a long-term investor, my goal is to take future cash dividends and gain capital. Hence my renewed interest in this sliding stock.

I would love to buy this stock today

What’s more, Man Group’s foundation now looks pretty good to me. After falling in March, the stock is trading at a historical price-to-earnings ratio of 5.7, for a yield of 17.5%.

Additionally, its dividend payout of 6% a year is higher than the FTSE 100’s annual cash yield of 3.7%. Even better, it is guaranteed 2.9 times by earnings, which is a solid margin of safety. Also, the group bought back $125m (£101m) of shares.

Obviously, as a leading hedge-fund manager, Man Group’s earnings can fluctuate wildly, especially in volatile markets. And if the financial market loses again, the company’s stock can beat again. In addition, poor fund performance may cause clients to withdraw their funds.

Even so, this FTSE 250 stock looks very cheap to me. So I’ve added it to my buy list today. If only I had the money to buy it now!