Our Stock of the Week is Nu Holdings, Inc. (NU). NU offers digital banking platform and financial services in Brazil, Mexico, Colombia, and internationally. It offers Nu credit and debit cards and mobile payment solutions that allow NuAccount customers to make and receive transfers, pay bills, and make everyday purchases through their mobile phones. The company provides savings solutions, such as Nu Personal Accounts, a digital account solution that supports all personal finance activities, from daily purchases and money transfers to savings. Nu’s business accounts are designed specifically for entrepreneur customers and their businesses. In addition, it offers NuCrypto, a solution for buying and selling cryptocurrencies through the Nu app.
NU recently announced that it has hit 90 million customers, up from 70 million a year ago.
Warren Buffett’s Berkshire Hathaway holds a 2% stake in the company. It has been one of its best-performing investments this year.
On October 19, Morgan Stanley named NU a ‘Top Pick’ and raised its price target to $16 from $11. The analysts stated that the market is “significantly underestimating” Nubank’s ability to deliver growth and profitability, as increasing product penetration in Brazil and success in Mexico and Colombia are “not priced in.” The firm believes Nubank could reach $100B in valuation by 2026 from the current market cap of around $38 billion.
Technically, the stock is showing exceptional relative strength in a poor market. We are watching for a breakout move before earnings around November 15, but in this market environment, it may be challenging to gain sustained momentum.
As always, we will not chase strength on Monday but will aggressively trade the stock as it develops.
This post is for educational purposes only! This is not advice or a recommendation. We do not give investment advice. Do not act on this post. Do not buy, sell, or trade the stocks mentioned herein. We WILL actively trade this stock differently than discussed herein. We will sell into strength and buy or sell anytime for any reason. We will actively trade into any unusual activity. At the time of this post, principals, employees, and affiliates of Shark Investing, Inc. and/or principals, clients, employees, and affiliates of Hammerhead Financial Strategies, LLC, directly or indirectly, controlled investment and/or trading accounts containing positions in NU. To accommodate the objectives of these investing and/or trading accounts, the trading in these shares will be contrary to and/or inconsistent with the information contained in this posting.
