Good morning dear community,
Today, right after my breakfast (it's now 10:30 here), I thought of you again and found an assessment of a favorite $NU (-4.25%) that I would like to pass on to you.
I am no longer invested at the moment, but I do see long-term potential and think that it could become a tenbagger for the buy&hold group.
But you need patience. I don't have the time component, so I won't be investing at the moment.
Aktienwelt360 - You might think that the search for the next Tenbagger is child's play. A few analyst forecasts, a crisp stock - and a profit of 1,000 % seems within reach.
As experienced investors, we of course know that it's rarely that easy. But with Nu Holdings (WKN: A3C82G), the Brazilian fintech star, the idea seems particularly great. After all, the company not only promises growth, but also fundamental change in the South American banking sector. Even Warren Buffett praised the digital bank not so long ago.
The Nu Holdings business model
Nu Holdings has managed to do what few have managed to do: attract millions of customers to a lean, digital banking model. Yes, you could describe Nubank as a South American N26, but with a different, still limited regional focus.
In a region where traditional banks often stand out with high fees, complicated structures and low customer satisfaction, Nubank scores with a user-friendly app, favorable conditions and high transparency.
With over 122 million customers, the fintech company has long since exceeded a critical mass. This enables economies of scale and the development of new business areas - from loans and insurance to investments.
The business has come at the right time, as digital banks are booming and Nubank is a first mover in South America, particularly in Brazil, with an extraordinarily large footprint. Profits are already substantial, as the second quarter shows with a surplus of USD 637 million. Sales growth is exceptionally high at almost 30%.
Growth opportunities and risks of the digital bank
The idea that Nu Holdings could now become the next Tenbagger is based on two factors: firstly, the huge addressable market in Latin America and secondly, the above-average growth of recent years. While some traditional banks are stagnating, Nubank is growing at double-digit rates in terms of customers and revenues.
In addition, the dynamics of the emerging markets should not be ignored due to their demographic development. Shares from these countries generally have a higher risk/reward profile. A possible strategy here could be as follows: Buy, leave it and see what has become of it after 15 years.
Nevertheless, the risks should not be underestimated, as the credit business is susceptible to macroeconomic fluctuations - especially in a region characterized by inflation, currency turbulence and political uncertainty. Latin America has seen a lot of this in the past.
The time and valuation factor
Whether Nu Holdings actually offers a return potential of 1,000 % therefore depends not only on the business model, but also on the time horizon and the political and economic conditions. Such a multiplication presupposes that the company maintains its current growth momentum for years and scales profitably.
I am optimistic in this respect, even though Warren Buffett quickly revised his position. However, this need not be taken negatively, as Buffett is considered to be price sensitive. In the long term, however, Nu Holdings can easily grow into its valuation. The P/E ratio could have fallen to below 15 as early as 2027.
The article Dies ist die nÀchste Tenbagger-Aktie mit 1.000% Gewinn!? was first published on Aktienwelt360.
