10 Best Robinhood Stocks Under $20

1. Nu Holdings Ltd. (NYSE:NU)

Number of Hedge Fund Holders: 63

Share Price as of June 12: $11.58

Nu Holdings Ltd. (NYSE:NU) is a Brazil-based company that offers a digital banking platform. The company’s various solutions include Nu credit and prepaid cards, mobile payment solutions, and an integrated mall called Nu Shopping, among others. The company is at the top of our best Robinhood stocks under $20.

In the first quarter, hedge fund sentiment was positive toward Nu Holdings Ltd. (NYSE:NU) and in the first quarter, 63 hedge funds held positions in the company and their stakes amounted to $5.564 billion. This is compared to 54 funds in the fourth quarter of 2023, with positions worth $4.538 billion. As of March 31, Warren Buffett’s Berkshire Hathaway is the most dominant shareholder in the company and has a position worth $1.28 billion.

In our previous article, we discussed the up-and-coming stock Nu Holdings Ltd. (NYSE:NU). The company showed strong customer acquisition and retention capabilities across its primary markets, particularly in Brazil and Mexico. As of Q1 2024, Nu reported a customer base of 99.3 million, representing a 26% year-over-year increase. Nu Holdings Ltd. (NYSE:NU) stands as a leading digital banking platform in Latin America, with notable growth in Mexico, where the customer base surged by 106% year-over-year to 6.6 million.

In addition to customer growth, Nu Holdings Ltd. has reached significant financial milestones. For Q1 2024, the company reported revenues of $2.7 billion, marking a 66.7% increase compared to the previous year. This revenue growth was driven by a 30% year-over-year rise in average revenue per active customer, which climbed to $11.4. The company operates efficiently, maintaining a low cost-to-serve per active customer at $0.90.

Nu Holdings Ltd.’s (NYSE:NU) earnings have been improving consistently and according to analyst consensus, it is expected to report an EPS of $0.42 in 2024, up 100% from its FY 2023 numbers. Moreover, even after exceeding 100 million customers, the company has significant room to grow and showing promising results in Mexico. The company’s growth in Mexico is outpacing its performance in Brazil at a similar stage, with significant milestones in customer acquisition and market share. For instance, Nu Mexico has already achieved $1.6 billion in credit card purchase volume, representing a 6.1% market share, compared to 4.3% in Brazil at the same period. Additionally, Nu Mexico has accumulated $2.3 billion in retail deposits, more than doubling from the end of 2023 and representing a 1.2% share of total deposits in Mexico.

Baron FinTech Fund stated the following regarding Nu Holdings Ltd. (NYSE:NU) in its first quarter 2024 investor letter:

“Nu Holdings Ltd. (NYSE:NU) is a digital bank with operations in Brazil, Mexico, and Colombia. Shares appreciated during the quarter after the company reported strong balance sheet growth and improving margins. New product launches and expansion in newer countries are yielding favorable results. Nu also benefited from inclusion in the MSCI Brazil Index, which prompted buying from passively managed funds. We continue to own the stock because Nu is disrupting the financial services industry in Latin America with its digital distribution and intense focus on user experience. The company has grown to serve over 90 million customers in less than 10 years, largely through word-of-mouth referrals. We believe the company’s superior product offering will drive continued share gains in large and growing markets. “

While we acknowledge the potential of Nu Holdings Ltd. (NYSE:NU) to grow, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns, and doing so within a shorter timeframe. If you are looking for an AI stock that is more promising than NVIDIA but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.

Read Next: Analyst Sees a New $25 Billion “Opportunity” for NVIDIA and Jim Cramer is Recommending These 10 Stocks in June.

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