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Inter & Co $INTR (-1.14%) is a Brazilian fintech company that started out as a digital bank and now offers a wide range of financial services. The company is listed on the Nasdaq and is one of the fastest growing digital banks in Latin America. But what makes Inter & Co special, how does it compare to the competition and what are the opportunities and risks?

Overview: What is Inter & Co?

Inter & Co started out as a traditional bank, but in recent years has transformed itself into a digital financial platform with a wide range of products:

🔘 Digital banking: free current account, credit cards, transfers

🔘 Loans & mortgages: consumer loans, SME financing

🔘 Investment & trading: shares, ETFs, cryptocurrencies

🔘 Insurance: Various policies for customers

🔘 E-commerce & cashback: Inter Shop combines online shopping with cashback systems

The business model aims to bundle as many services as possible in one app ("super app" approach), similar to Nubank or MercadoLibre with MercadoPago.

Competition: Who are the competitors?

Inter & Co is in direct competition with other digital banks and fintechs in Brazil and Latin America. The most important players are:

🔸Nubank $NU (+1.07%) The market leader with over 80 million customers in Brazil, Mexico and Colombia. Very strong in credit cards and loans.

🔸PagSeguro $PAGS : Focus on payment services and small businesses.

🔸StoneCo $STNE: (-1.77%) Also strong in the payment sector, but with more focus on merchant solutions.

🔸Banco do Brasil $BBAS3 The traditional banks that are increasingly developing digital offerings.

Inter & Co is differentiated by its broad platform, which goes beyond banking and is strongly integrated into e-commerce and cashback.

Opportunities: Why is Inter & Co interesting?

🟢 Growth market Brazil: The digitalization of the financial sector is progressing rapidly in Latin America. Millions of people are still underserved and the demand for simple digital solutions is high.

🟢 Scalable model: Inter & Co has over 30 million customers (as of 2024) and continues to grow. The platform approach enables cross-selling of financial products and increases customer loyalty.

🟢 Profitability in sight: While many fintechs are making high losses, Inter & Co has its cost structure under control and could become profitable in the medium term.

🟢 Expansion potential: In addition to Brazil, Inter & Co is slowly expanding into other Latin American markets. If growth continues, the share could benefit from rising market shares in the long term.

🟢 E-commerce integration: The combination of banking and shopping platform (Inter Shop) brings additional sales potential. This model is unique in Brazil and could be a strong source of income in the long term.

Risks: What could go wrong?

⚠️Starker Competition: Nubank $NU (+1.07%) is an extreme competitor with massive financial resources. Traditional banks are also responding with digital offerings.

⚠️ Interest rate environment & loan defaults: Brazil traditionally has high interest rates. If the interest rate level continues to change, it could affect lending and therefore the profits of Inter & Co.

⚠️ Slow internationalization: While Nubank is already very active in Mexico and Colombia, Inter & Co has so far focused almost exclusively on Brazil. International expansion could prove difficult.

⚠️ Macroeconomic uncertainties: Brazil is susceptible to economic fluctuations and currency risks. A recession or inflation could have a negative impact on credit quality.

Conclusion: Is an investment worthwhile?

Inter & Co is definitely an exciting fintech with an innovative business model. The integration of banking, investments and e-commerce in one platform offers enormous potential. The market in Brazil continues to grow and the company has a solid customer base.

However, Inter & Co also faces major challenges: Competition is tough and expansion is slower than at Nubank. In addition, profitability and scaling have yet to be proven.

For risk-tolerant investors with a long-term horizon, Inter & Co could be an interesting turnaround opportunity - especially if the company continues to gain market share and becomes more profitable.

What do you think? Is Inter & Co a potential high-flyer or more of a risk investment? I look forward to hearing your opinions!

Classic Buy&Hold share -> Stocked up 👋🏻

Stock analysis StoneCo
$STNE (-1.77%)

StoneCo Ltd. is a provider of financial services (84%) and software (15%). StoneCo is active in an exciting emerging market: Brazil.

But first, the key figures:

Price: $13.25 (YTD +40%) (-85% from ATH) (-58% IPO 2018).

KUV: 2

P/E RATIO: 4730

forward P/E ratio: ~18

Revenue growth yoy: +31% (Q1 2023)

5y avg. Revenue growth: +74.44%

EBIT growth yoy: 240.56%

5y avg. EBIT growth: 40.90%

I became aware of the company mainly due to the catastrophic development of the share price, which resulted in a (supposedly) favorable valuation of a fast growing company.

What happened?

In May 2021, StoneCO acquired a stake in Banco Inter for the equivalent of $471 million dollars. At the time, StoneCo had a valuation of approximately $20 billion (~$4.15 billion today). However, this stake rapidly depreciated, resulting in a -90% loss (StoneCo fully liquidated its stake in Banco in February 2023). Accordingly, the losses had a negative impact on the results of the last quarters and triggered a crash in the share price. StoneCo had not only bought a completely overpriced stake, but at the same time had borrowed in a foreign currency (dollars) with rising interest rates. The falling exchange rate of the Brazilian real to the U.S. dollar also played an important role here. To finance the deal, some new shares had to be issued (see picture no. 1).

Why should the company or the share be interesting at all?

The management was gradually replaced after the gross blunder. A new CFO and a new CEO were hired. With Pedro Zinner, the company is now headed by an experienced CEO who had already achieved a successful turnaround at Envea.Although the Banco deal eroded StoneCo's fundamentals, the operating business continued to perform very well. StoneCo continues to record strong growth and is even gaining market share (see picture no.2). Profits are being written again and a large cash position is being built. The negative one-off effects that affected the results are now a thing of the past and nothing seems to stand in the way of strongly increasing profits. Measured against the growth rates, a forward P/E ratio of 18 is very favorable, even if growth is slowing down somewhat. Debt is now covered by assets again and the company is in a much better position than 2 years ago.Macro environment: The Brazilian Central Bank currently has an interest rate of 13.75% after strong interest rate hikes. Currently, inflation there is around 4%, close to the central bank's target of 3.25%. So a rate cut in the near future is definitely in the realm of possibility - which could provide further upside for the stock price.

Conclusion:

In my opinion, with StoneCo you get a fast-growing, yet profitable company in a fast-growing sector of an exciting emerging market. The downside is limited due to the crashed share price, currently the company is undervalued (by my personal valuation standards), but it also needs to win back investor confidence first. Nevertheless we are dealing here with a ailing company in a difficult market environmentwhich is also exposed to political risks in Brazil. So please inform yourself again intensively before you click here on buy :D

No investment advice and information to the best of my knowledge based on the sources.

Sources:

https://investors.stone.co/news-releases/news-release-details/completion-ceo-transition

https://investors.stone.co/static-files/c62e910c-9608-425f-9ff7-c56c335f0087

https://www.nasdaq.com/articles/stoneco-signs-%24471m-investment-agreement-with-banco-inter-2021-05-25

Also: MSN Finance, Yahoo Finance, MarketScreener

getquin Daily Summary 23.11.2022

Hello getquin,

Happy Wednesday to all of you. How did the week go for you? Are your portfolios in the green?

Europe🌍:

• Credit Suisse shareholders give green light to $4.2 billion capital increase. Read more: https://cnb.cx/3AE7QHS

• Credit Suisse to lay off one-third of investment bankers working in China. Read more: https://reut.rs/3AD3FvG

• German authorities search BNY Mellon bank as part of cum-ex investigation. Read more: https://reut.rs/3VoWizV

• 33 percent for oil and gas companies: that's Lindner's plan for an excess profits tax. Read more: https://bit.ly/3AGQmue

• Uniper needs up to 33 billion euros in capital from the state. Read more: https://bit.ly/3U3hdrt

• Manchester United parts ways with Ronaldo. Read more: https://bit.ly/3ETrNwO

America🌏:

• White House extends student loan repayment break until June 2023. Read more: https://bit.ly/3V5e5fW

• US Congress holds hearing on Ticketmaster issues after Taylor Swift debacle. Read more: https://reut.rs/3XsQZ4j

• Pipe's founding team steps down and search begins for 'experienced' CEO. More: https://tcrn.ch/3i9uHEQ

• Recession fears drive media industry layoffs. Read more: https://bit.ly/3U70kMh

Asia🌏:

• China leads global IPO volume this year. Read more: https://reut.rs/3OuX3oS

Stocks of the day:

🟩 TOP $MANU (+0.19%) 9,62€ (🔼 +16,49%)

🟥 FLOP $STNE (-1.77%) 10,16€ (🔽 -6,67%)

🟩 Most searched $TSLA (-0.25%) 172,70€ (🔼 +4,69%)

🟥 Most traded $UN01 6,42€ (🔽 -4,24%)

🟩 S&P500, 4.024,31 (🔼 +0,52%)

🟩 DAX, 14.429,93 (🔼 +0,05%)

🟩 Bitcoin ₿, 15.794,16€ (🔼 +0,53%)

Time: 17:00 CEST

#MarketNews
#MarketNewsUpdate

getquin Daily Summary 19.08.2022

Hello getquin,

BVB wants to make profits as well as goals with fiscal year 2023/2024. Also, John Culver is leaving Starbucks after two years. Revolution Beauty suspends stock trading and today's quarterly number is John Deere!

Europe🌍:

1. Borussia Dortmund aims to return to profit in fiscal year 2023/2024

After the second full season of the pandemic, Borussia Dortmund reports a loss of 35 million euros. The minus from the previous year was still 72 million euros. The club published these preliminary figures for the 2021-2022 fiscal year.

One factor was that the Bundesliga soccer club was able to offer only 40 percent of tickets through Corona, on the one hand, due to its early elimination from the Champions League and, on the other hand, received less money from TV advertising. Instead of just under 187 million euros, BVB took in 145 million here. Revenue from match operations rose from almost zero to 22.6 million euros. Due to the pandemic in the previous season, no spectators were allowed in the Bundesliga.

Don't just invest in soccer tickets? https://bit.ly/3Axjtk4

🟥 $BVB (-1.54%) (🔽 -0,72%)

America🌏:

2nd Starbucks chief to leave the company

Starbucks Chief Operating Officer John Culver is leaving the company after two decades with the coffee chain as part of a restructuring that will eliminate his role.

His departure comes at a time of major executive restructuring at Starbucks. Former CEO Kevin Johnson retired earlier this year, prompting Howard Schultz to return to the top job as interim chief executive until a long-term successor is named.

Read more here: https://cnb.cx/3QWS0Ok

🟥 $SBUX (+0.23%) (🔽 -1,04%)

Asia🌏:

3rd Revolution Beauty suspends stock trading due to accounting concerns

Revolution Beauty Group said Friday that trading in its shares will be suspended from Sept. 1 as the beauty products maker does not expect to report its 2022 results by Aug. 31 after auditors found accounting issues.

Click here for Insights: https://reut.rs/3c1pHzu

🟥 $REVB (+0%) (🔽 -34,74%)

Quarterly figures:

🚜 John Deere
$DE (+0.28%)

Deere & Co on Friday revised its full-year profit forecast after missing Wall Street's earnings expectations as the world's largest farm equipment maker struggled with parts and semiconductor shortages due to supply chain constraints.

EPS: 🟥 $6.68 expected vs $6.16 published; Difference: -7.74%

Revenue: 🟩 $12.84 billion expected vs $13.00 billion published; variance: 1.23%.

Stocks of the day:

🟩 TOP $AXSM (+0.17%) 56,45 € (🔼 +34,68%)

➡️ Biopharmaceutical company

👍 FDA approval for drug

🟥 FLOP $STNE (-1.77%)
8,63 € (🔽 -21,94 %)

➡️ payment and management instruments,

👎 Quarterly figures

🟥 Most searched $AAPL (+0.64%) 171,38€ (🔽 -0,75%)

🟥 Most traded $BBBY 11,18€ (🔽 -6,26%)

🟥 S&P500, 4,237.27 (🔽 -1.08%)

🟥 DAX, 13,575.01 (🔽 -0.89%)

🟥 bitcoin ₿, €21,314.70 (🔽 -7.26%)

Time: 16:45 CEST

Fun Fact:

Did you know that U.S. companies are reportedly hiding $1.6 trillion in profits overseas?