$NU : Nu Holdings Ltd. is a number one digital monetary providers platform working primarily in Latin America, providing a complete suite of progressive banking options throughout a number of nations.
Present Worth = $11.41, MC = 54B
Gone are the times of customers having to go to their native department to maintain something associated to their cash wants. Smartphones and the web have modified monetary providers, permitting a enterprise like Nu to supply financial institution accounts and bank cards, amongst different issues, digitally to customers.
The corporate has been rising like wildfire. Nu posted $2.9 billion in income within the final three months, a determine that was 56% larger than in the identical interval final yr. The corporate has 110 million prospects right this moment, in comparison with simply 48 million three years in the past.
Nu has a robust place in its foremost market of Brazil, however it has began to make progress in newer nations like Mexico and Colombia.
In accordance with Latin America Studies, an estimated 70% of the inhabitants on this area of the world stays unbanked or underbanked, giving Nu an enormous alternative.
Nu’s top-line development has translated into unbelievable profitability. Internet earnings surged 107% yr over yr to $553 million in Q3. The revenue margin expanded significantly within the final 12 months.
NU has 100m Brazilian prospects, which suggests out of their complete 216m inhabitants, 46% of the inhabitants makes use of NU.
Bull case? Future Progress?
The place does the additional development come from now?
NU CEO throughout an interview: – 14% market share in bank cards, 7% market share in private loans, 2% in investments & financial savings, displaying there may be far more potential for development inside brazil.
Nu captures a lot of the decrease earnings people additionally, CEO states they will quickly department into larger internet value prospects inside brazil.
NU’s enlargement into each Mexico and Colombia has the potential to considerably increase the corporate’s development and market attain.
Huge untapped market: An estimated 70% of the inhabitants in Latin America stays unbanked or underbanked, offering Nu with an enormous alternative for enlargement.
Confirmed success in new markets: In Mexico, Nu has already develop into the fifth largest credit score issuer inside simply 5 years of coming into the market. This demonstrates the corporate’s capacity to shortly achieve traction in new territories.
Diversification of income streams: Increasing into Mexico and Colombia permits Nu to scale back its dependence on the Brazilian market, doubtlessly mitigating country-specific dangers.
Scalable enterprise mannequin: Nu’s digital-first strategy and low-cost construction may be successfully replicated in these new markets, doubtlessly resulting in speedy buyer acquisition and profitability.
Cross-border synergies: As Nu expands its presence throughout a number of Latin American nations, it may doubtlessly supply seamless cross-border monetary providers, which might be significantly enticing to companies and people working throughout these markets.
First-mover benefit: By establishing a robust presence in these markets early, Nu can doubtlessly construct model loyalty and seize market share earlier than conventional banks totally digitize their choices.
Elevated negotiating energy: A bigger presence throughout a number of nations may give Nu extra leverage when negotiating with regulators, companions, and suppliers.
This enlargement technique, if executed efficiently, has the potential to rework Nu from a Brazilian success story right into a dominant fintech participant throughout Latin America.
RISKS:
BRAZILIAN GEO-POLITICAL ENVIRONMENT
-Brazilian financial considerations: Traders are frightened about forex devaluation points in Brazil and inflationary headwinds in Nu’s major market.
SHORT-TERM OPERATIONAL RISK IN MEXICO & COLUMBIA
Rate of interest modifications: Latest rate of interest modifications in Colombia and Mexico, the place Nu additionally operates, have created short-term challenges for the corporate.
Possession:
Robust and rising institutional possession. – SORUCE S&P CAPITAL IQ PRO
Financials:
Robust income (curiosity earnings) development
Grew to become worthwhile final monetary yr
Additionally, BIG G BUFFETT owns 86,438,997 shares. eleventh largest shareholder.
I’ve been ACCUMULATING early-mid yr OTM calls, earnings in FEB may see a place shock.
Calls are insanely low-cost proper now.
POSITIONS:
21 MAR $13 C. – present value .38
21 MAR $14 C – present value .22
16 MAY $15 C – present value .34
15 AUG $16 C – present value .48
GODSPEED
