Israel Englander’s hedge fund recently bought 30.9 million shares of Nu Holdings, a financial services company that operates in Latin America. This move increased the fund’s position in the stock by 370%. Nu Holdings has caught the attention of other prominent investors like Warren Buffett and Cathie Wood.
The company offers banking services such as credit cards, lending, insurance, and investing through an online platform. Its main advantage is its strong presence in the Latin American market. Digital banking is still a growing trend in Latin America.
According to the Inter-American Development Bank, fintech startups in the region have increased by 340% in the past six years. Brazil, Mexico, and Colombia are leading this growth, which has benefited Nu Holdings.
Nu Holdings investment growth analysis
The company has seen impressive customer growth, going from 5 million customers in 2018 to 105 million by the end of the second quarter of 2024. As Nu Holdings gains more customers, it can improve its unit economics by cross-selling additional products and services. Nu Holdings has shown strong financial performance with consistent revenue growth over 50%, gross profit margins above 40%, and positive net income.
The company currently trades at a P/E multiple of 23.8, which is similar to the S&P 500 average but lower than other emerging fintechs like SoFi Technologies. Given its dominance in Latin America and impressive financial metrics, Nu Holdings appears to be a promising opportunity for long-term investors. The substantial investment by Englander’s hedge fund is seen as a smart move.
In conclusion, Nu Holdings stands out in the crowded financial services market, especially in Latin America. The backing from high-profile investors and its strong growth make it an attractive consideration for investors seeking long-term growth potential.
