Cathie Wood and Warren Buffett are two of the most well-known traders in the world, albeit for very totally different causes.
Buffett runs the massive conglomerate Berkshire Hathaway (BRK.A 0.01%) (BRK.B -0.57%) and has traditionally been a worth investor, though he dabbles in a wide range of investing methods and in nearly each trade. Wood, on the different hand, runs ARK Invest, which manages a number of exchange-traded funds (ETF) targeted on progress shares and is understood for being a big-tech investor and a believer in crypto, as nicely.
While they’ve totally different investing methods, each Berkshire and ARK occur to personal two of the similar shares. Those two shares simply occur to be doing fairly nicely in comparison with the broader market so far in 2023. Let’s take a more in-depth have a look at these two shares.
Berkshire and ARK each appear to be in the fintech area in Latin America, notably in Brazil, which is a really fast-growing banking and monetary market. ARK Invest owns 2.45 million shares in the funds and e-commerce firm StoneCo (STNE -0.60%), valued at round $25 million. Berkshire owns near 10.7 million shares, valued at greater than $114 million.
StoneCo inventory is up about 32% this 12 months, which compares very favorably to the S&P 500‘s roughly 5% rise so far this 12 months. Tech shares, in basic, have rallied, because of favorable knowledge these days relating to inflation.
StoneCo makes it simpler for retailers in Latin America to do enterprise and drive gross sales, each on-line and in individual. This contains offering varied monetary companies equivalent to funds, digital banking, and varied lending merchandise, in addition to software program, equivalent to an e-commerce platform, market, and buyer interplay instruments. At the finish of the third quarter of 2022, StoneCo had greater than 2.3 million fee shoppers producing $14.5 billion in quantity throughout its platform.
The firm has struggled on account of geopolitical and macro headwinds in Brazil in 2022, that are a standard theme in the nation, however continues to be displaying promising progress in a high-opportunity market. The inventory trades at about 18 instances ahead earnings, which is a progress valuation however definitely not unreasonable, given the alternative.
2. Nu Holdings
ARK Invest owns the Brazilian digital financial institution Nu Holdings (NU 3.31%) in each its ARK Fintech Innovation ETF and its ARK Next Generation Internet ETF. Collectively, ARK owns near 4.5 million shares, value greater than $18.1 million. Berkshire owns greater than 107 million shares, valued at near $431.7 million. The inventory is up near 16% this 12 months.
Nu received its begin by providing bank cards with no annual charges to Brazilians and then expanded into many different banking merchandise and monetary companies. Its smooth fintech interface makes it loads simpler for patrons to make use of and entry than incumbent banks in Brazil.
Since launching in 2014, Nu amassed an astounding 70 million-plus prospects and now banks 39% of the Brazilian grownup inhabitants. Nu can be working in Mexico and Colombia. In the third quarter of 2022, the firm generated greater than $1.3 billion in income and even managed a small profit of $7.8 million.
But being a financial institution, Nu is not proof against broader macro headwinds, which have added considerations over how its bank card and private mortgage portfolio would possibly maintain up. Still, it isn’t frequent to see a fintech firm with this type of unbelievable progress that additionally displaying indicators of profitability.
Bram Berkowitz has positions in Nu. The Motley Fool has positions in and recommends Berkshire Hathaway and StoneCo. The Motley Fool recommends the following choices: lengthy January 2023 $200 calls on Berkshire Hathaway, quick January 2023 $200 places on Berkshire Hathaway, and quick January 2023 $265 calls on Berkshire Hathaway. The Motley Fool has a disclosure policy.