Quiet week, now what? Portfolio Updates

July 7 2024, Update

The NASDAQ closed the week at new highs (+3.5%), mostly driven by mega-caps like Tesla and Meta.

The index looks healthy with all key moving averages trending higher.

Most importantly, the 10-year treasury finished the week with a strong move downwards and -1.6% for the week.

Oil closed the fourth positive week in a row. Luckily enough, the price is not at alarming levels just yet.

Next week we’ll get the CPI report for June 2024 and it should come at 3.1% YoY inflation. Any decimal below that level would make the markets happy. Let’s see what happens.

PORTFOLIOS

10X MOMENTUM POT

Here is what it looks like today after last week's buys:

My PYCR 0.00%↑ and ZETA 0.00%↑ orders were triggered. My HOOD 0.00%↑ order was not triggered.

• This week I am creating a BUY STOP order for 333 shares of NU 0.00%↑ if it touches 12.9 USD. First stop at 11.25 USD

• I have updated my Stop Loss levels for the other names.

NU Holdings is a 61 billion Market Cap Bank and Financial services based in Brazil and rapidly expanding in Latin America and beyond. The company is expected to grow above 40% YoY for the next 2 years.

After some weeks of lateral consolidation, it looks like is ready to resume its uptrend.

10X SMALL CAP MOMENTUM POT

Below is the Portfolio right now. I updated my Stop Loss levels.

I am not adding stocks anymore to this portfolio that will be closed as soon as I exit the above positions.

Last is the analysis by ChatGpt guided by me after going through that last Earnings call transcript for NU 0.00%↑ and a few analyst articles.

Strategic Initiatives

NU Analysis

Earnings Call Transcript:

• Revenue: Nu Holdings reported Q1 2024 revenues of $2.74 billion, a 69.02% Y/Y increase.

• Net Income: Net income reached $379 million, with adjusted net income at $443 million.

• Customer Growth: Nu's customer base exceeded 99 million, a 67% increase from two years ago, and has recently surpassed 100 million customers.

• Market Presence: Strong growth in Brazil, with significant momentum in Mexico and a growing presence in Colombia.

Analyst Articles:

• Continued Profitability: Articles highlight Nu’s efficiency and profitability, with expanding ARPAC and strong net income growth.

• Growth Prospects: Analysts see a substantial growth runway, particularly in Mexico and potential new geographies in Latin America.

• Valuation: Analysts argue that Nu is undervalued despite its recent stock price increase, citing a P/E ratio that remains attractive given its growth prospects.

Strategic Initiatives

Earnings Call Transcript:

• Product Expansion: Focus on secure lending initiatives in Brazil, expanding high-income segments, and leveraging technologies like real-time payments and AI.

• Geographic Focus: Prioritizing growth in Mexico and further expansion in Brazil and Colombia.

• Operational Efficiency: Maintains one of the lowest operating costs in the industry, with a cost to serve per active customer at $0.90.

Analyst Articles:

• Catalysts: Analysts expect new product launches and geographic expansion to be significant growth drivers. Success in Mexico and the potential for similar success in other Latin American countries are seen as key catalysts.

• Market Share: Nu's competitive positioning is strong, with the potential to disrupt traditional banking markets in new regions.

Risks and Challenges

Earnings Call Transcript:

• Credit Risk: Increased provisions for credit losses due to higher growth in unsecured personal loans and expansion in secured lending.

• Regulatory Environment: Navigating different regulations in Latin American countries poses a risk, although it can become a competitive advantage over time.

Analyst Articles:

• Economic Environment: Macroeconomic factors in Latin America, including currency fluctuations and inflation, could impact performance.

• Competition: Intense competition from both traditional banks and other fintechs in the region.

Final Recommendation

Given the strong financial performance, substantial growth prospects, strategic focus on new markets, and efficiency in operations, Nu Holdings appears to be a compelling investment. However, risks related to credit quality, regulatory challenges, and economic conditions in Latin America need to be considered.

Score: 9/10 (Strong Buy)

• Pros:

  • Significant revenue and customer growth.

  • High efficiency and profitability.

  • Large market opportunity in underbanked regions of Latin America.

  • Strong execution and strategic focus.

• Cons:

  • Credit risk due to expansion in unsecured loans.

  • Economic and regulatory risks in Latin America.

  • Competitive pressures.

Summary: Nu Holdings is positioned strongly in the fintech space with substantial growth potential and impressive financial metrics. The company's strategic initiatives and market opportunities outweigh the risks, making it a strong buy recommendation.

WATCHLIST

below are the other names on my shortlist for the week

That’s all for the week!

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Important: This is not investment advice. Consult a licensed financial advisor before making any investment decision.