Key insights
- An analyst expresses a bullish view on Brazilian fintech stocks (NU, STNE, PAGS), citing undervaluation and growth potential. Key risks include margin compression and credit losses in Brazil. The analyst has initiated positions in all three stocks, suggesting a positive, albeit limited, influence on US market sentiment towards emerging market fintech.
I've been looking into Brazilian Fintech stocks quite a bit. I believe they're undervalued. I've started building a position.
Nubank (NU)
I follow the fintech industry closely. My interest in this set of Brazilian companies started with Nubank.
Nubank is a dominant Latin American digital banking platform. I think it's one of the best fintechs in the world. It has scale, high growth, and profitability. It's currently trading at $12.90 US with a trailing PE of 19.84. They've been diversifying beyond Brazil.
I've picked up 500 shares at an average price of $12.52.
StoneCo (STNE)
This is a recovering business fintech platform. StoneCo had past execution failures. I think the current valuation still reflects that rather than the current fundamentals. It's currently trading at $11.09 US with a trailing PE of 4.02. They're evolving beyong payments into broader banking offerings. A lot hangs on management successful rebuilding trust after prior credit issues.
I've picked up 100 shares at the current price. I intend to add to this position.
PagSeguro (PAGS)
This company is profitable and cash generating. It's trading at a deep discount. The core payment business might be mature, but growth will come from banking, deposit growth, and lending operations. The company has also been running share buybacks.
The key risks to these stocks are margin compression from competition, and credit losses from a downturn in the Brazilian market. I think these risks are already baked into the price.
PAGS is currently trading at $9.16 US with a trailing PE of 6.71.
I picked up 500 shares at current prices.
As always, this isn't financial advice. I intend to hold these stocks for a while and am simply sharing them for awareness.