What do Warren Buffett and Cathie Wood have in common? They both own shares of Nu Holdings, Monday's pick for IBD 50 Stocks To Watch. The Brazil-based digital banking stock is back in the buy zone of a flat base.
Nu Holdings — which reports earnings Wednesday — provides digital banking services. It also operates NuInvest, a product that offers equity, fixed-income, options and ETF products.
It serves over 105 million customers across Brazil, Mexico and Colombia. The fintech stock holds the No. 1 spot out of 26 stocks in the Banks-Foreign industry group, which ranks No. 94 out of the 197 IBD industry groups.
Earnings Report On Tap
Nu Holdings reports its third-quarter earnings Wednesday after the market close. Estimates show 73% profit growth to 11 cents per share. Quarterly profits have been steadily climbing, and analysts expect EPS to grow by a penny per share over the next four quarters.
Full-year 2024 earnings estimates have been recently raised to 97% growth, with a 43% increase in 2025.
Revenue projections call for a 22% lift in Q3.
On Aug. 13, the company reported higher-than-expected second-quarter earnings but lower sales than forecasts. Profit doubled to 10 cents per share from 5 cents a share one year earlier. Sales growth slowed to 52% from an average of 65% over the last four quarters.
Buffett's Berkshire Hathaway owned 107.1 million shares of Nu stock as of October.
In addition, Wood's Ark Invest ARK Fintech Innovation ETF currently owns over 1.22 million shares of Nu.
Nu Stock Back In A Buy Zone
Nu stock rebounded off its 50-day moving average on Wednesday in postelection market strength, although volume was lighter-than-average. The Buffett stock revisited the 15.16 buy point of a flat base and is in the 5% buy zone up to 15.92, according to MarketSurge pattern recognition.
The digital banking stock gained around 3% Monday morning and is on track for its sixth straight gain. It has climbed around 88% so far this year. Nu is closing in on its all-time high of 15.98 set on Oct. 29, which could act as an alternative entry.
Mutual funds own 62% of Nu stock, with 1,210 funds owning the Buffett stock in September, up from 1,081 in June. Its 1.9 up/down volume ratio indicates positive demand for the stock over the last 50 days. It holds a 94 IBD Composite Rating.
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