The market has been riding Wild so far in 2025. S&P 500 I entered it briefly Modification Area Last week before swinging the backup. For new investors, it can be a scary time. But veteran investors know that it’s not only this par on the course, but also has a silver lining. You can find great stocks at great prices.
Nu Holdings (NYSE: NU) The S&P 500 has been below the market over the past year while rising 10%, but has grown below 1%. But it’s beginning to bounce back. Is it time to buy now?
NU offers digital banking and financial services in Brazil, Mexico and Colombia. They carve out their niche by opening in areas with major barriers to bank customers, and members are drawn to the ease of use of NU. It reports consistent solid quarter growth, and the regions it operates still have little access to digital financial and gives it a healthy runway.
In the fourth quarter of 2024, revenues increased 50% year-on-year, while net income rose to $369 million to $552.6 million. Costs to service remained a steady quarter at $0.80 per customer over the quarter, down from $0.90 a year ago.
NU was originally created to meet the needs of a mass population that had no access to Brazil’s highly regulated and expensive banking system, but touched those looking for a better banking experience. Although they already have 58% of Brazil’s adult population as clients, they continue to add 1 million new members each month, with 61% of monthly active using NU as their primary bank account. NU is currently the third largest bank in Brazil from a member’s perspective, but there is a huge amount of growth in Brazil. For example, the wealthy consumer service, UV customers, rose 132% year-on-year, but that number is still small at 688,000.
Nu’s has a slight presence in Mexico and Colombia, and although it was launched after Brazil, it still has no complete business. These two markets have expanded high savings accounts in these two markets, attracting new members, and are growing faster than in Brazil. Mexico has 10 million customers, up 91% from the previous year, or 12% of the adult population in 2024. Under the line there are many other neighbouring countries where NUs that do not have the optimal fintech solution can enter.
Nu is Warren Buffett Stockalthough it doesn’t fit the classic Buffett style at all, as it is a young growth stock. He loves bank stocks, but there’s something to note about NU, which he has mentioned several times that Buffett is important in a great business. Nu’s low overhead model brings high profits, with Nu’s ROE at 28% in 2024, placing it at the top tier of financial institutions around the world.
