10 Oversold Global Stocks To Buy Right Now

4. XP Inc. (NASDAQ:XP)

14-day RSI Score: 23.24

Number of Hedge Fund Investors In Q3 2024: 25

XP Inc. (NASDAQ:XP) is a Brazilian financial technology company that caters to the needs of retail, institutional, and other investors. While it has a diversified customer base, most of the firm’s revenue is dependent on retail investors. This is evidenced by XP Inc. (NASDAQ:XP)’s income statement for the third quarter which saw retail investors account for 77% of the firm’s gross revenue for the quarter. Within its retail revenue, 30% came through equities while an additional 27% was from fixed income. This is an important factor when analyzing XP Inc. (NASDAQ:XP)’s hypothesis as equities and fixed income tend to thrive in diametrically opposed economic environments. To wit, the firm’s third quarter fixed income retail business grew by 31% annually to touch R$938 million while the equity component dropped by 6%. However, the sizable nature of its equities revenue means that XP Inc. (NASDAQ:XP) depends on the strength of the Brazilian consumer and the economy to spur equities trading.

Despite its reliance on the retail sector, XP Inc. (NASDAQ:XP) is also focusing on other investors. Here’s what the firm had to say about one such segment during the Q3 2024 earnings call:

“Lastly, transitioning from a product distribution firm to a service provider is key to differentiate ourselves from other players for the next decade. While competitors render financial planning to ultra-high private bank clients, we are offering to clients with 300K and above, which is only possible because of our tech-enabled platform. No other player in Brazil can do it on the same scale we are doing. We continuously keep improving our service and product offerings. And the combination of these levers are translating to a consistent retail net inflow, higher productivity, higher quality from a client perspective, and more profitability for the Company. Noteworthy that we received many questions regarding retail take rate direction. As we said recently, for the mid-term, we do not expect big change, and this quarter, it increased 4 bps marking 1.33%.”