3 Stocks To Buy From Warren Buffet’s Portfolio - StoneCo

2 – StoneCo Ltd

StoneCo Ltd. is a Brazil-based fintech company that provides end-to-end cloud-based financial technology solutions for electronic commerce in store, online and mobile channels. Like DaVita, Brazilian fintech firm StoneCo also profited Buffett investors. Latin Americans make most of their purchases in cash. It also offers unique opportunities to fintech companies that specialize in serving cash-based communities such as StoneCo. These opportunities have certainly attracted direct competitors such as PagSeguro (NYSE: PAGS) and Latin American e-commerce giant Mercado Libre. Following these opportunities, Mercado Libre focused on payment challenges in the online retail business by establishing MercadoPago. StoneCo stands out with the flexibility of its products and services that are far from bureaucracy and close to its customers. This approach allows it to localize quickly and train a sales force wherever it is needed. In addition, it becomes quite easy for customers to integrate into the StoneCo ecosystem. Although PagSeguro and MercadoPago compete with StoneCo in their product offerings, they are unable to raise their localized sales and customer service to the level of StoneCo.   Brazil's fight against COVID-19 is quite weak compared to other countries. And that's why we can say that the pandemic slowed down the growth of the company significantly and temporarily. The company's 2020 revenue increased by 29 percent for the year's total and 63 percent in its total payment volume. Excluding investments in technology, high consulting costs associated with a recent merger, and high marketing costs, net revenue increased by 4 percent. Total payment volume increased 55 percent in 2019, while revenue increased 63 percent and net income 164 percent.

Investors should also note that StoneCo outperformed PagSeguro.

PagSeguro increased 41 percent of total payment volume and 19 percent in revenue in 2020. In addition, PagSeguro net income decreased by about 6 percent in the same period. StoneCo shares rose nearly 157 percent last year, while PagSeguro increased 143 percent in the same period. In addition, StoneCo continues to be significantly more expensive, backed by a Price/Earnings ratio of over 120, compared to PagSeguro's Price/Earnings ratio of around 64.

Still, increased net income, a faster total payments volume, and revenue increases help StoneCo to stand out.

Assuming that growth rates can return to pre-pandemic levels, StoneCo will likely continue to be privileged and Berkshire Hathaway will continue to invest in company stock.   3 Stocks To Buy From Warren Buffet’s Portfolio - StoneCo Source: https://www.fool.com/ You may also be interested in:

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