$NU : Nu Holdings Ltd. is a number one digital monetary companies platform working primarily in Latin America, providing a complete suite of modern banking options throughout a number of nations.
Present Value = $11.41, MC = 54B
Gone are the times of customers having to go to their native department to handle something associated to their cash wants. Smartphones and the web have modified monetary companies, 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% increased than in the identical interval final 12 months. The corporate has 110 million prospects in the present day, in comparison with simply 48 million three years in the past.
Nu has a robust place in its predominant market of Brazil, nevertheless it has began to make progress in newer nations like Mexico and Colombia.
Based on 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 progress has translated into unbelievable profitability. Internet revenue surged 107% 12 months over 12 months 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 whole 216m inhabitants, 46% of the inhabitants makes use of NU.
Bull case? Future Progress?
The place does the additional progress come from now?
NU CEO throughout an interview: https://www.youtube.com/watch?v=vTfxwu4JaRw – 14% market share in bank cards, 7% market share in private loans, 2% in investments & financial savings, displaying there’s way more potential for progress inside brazil.
Nu captures a lot of the decrease revenue people additionally, CEO states they’ll quickly department into increased internet price prospects inside brazil.
NU’s enlargement into each Mexico and Colombia has the potential to considerably enhance the corporate’s progress and market attain.
Large 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 turn into the fifth largest credit score issuer inside simply 5 years of getting into the market. This demonstrates the corporate’s skill to shortly acquire traction in new territories.
Diversification of income streams: Increasing into Mexico and Colombia permits Nu to cut back its dependence on the Brazilian market, doubtlessly mitigating country-specific dangers.
Scalable enterprise mannequin: Nu’s digital-first method and low-cost construction might 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 might doubtlessly supply seamless cross-border monetary companies, which might be notably 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 might 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 issues: Buyers are anxious about forex devaluation points in Brazil and inflationary headwinds in Nu’s major market.
SHORT-TERM OPERATIONAL RISK IN MEXICO & COLUMBIA
Rate of interest adjustments: Latest rate of interest adjustments in Colombia and Mexico, the place Nu additionally operates, have created short-term challenges for the corporate.
Possession:
Sturdy and rising institutional possession. – SORUCE S&P CAPITAL IQ PRO
Financials:
Sturdy income (curiosity revenue) progress
Grew to become worthwhile final monetary 12 months
Additionally, BIG G BUFFETT owns 86,438,997 shares. eleventh largest shareholder.
I’ve been ACCUMULATING early-mid 12 months OTM calls, earnings in FEB might see a place shock.
Calls are insanely low-cost proper now.
POSITIONS:
21 MAR $13 C. – present worth .38
21 MAR $14 C – present worth .22
16 MAY $15 C – present worth .34
15 AUG $16 C – present worth .48
GODSPEED
