15 Best Beaten Down Stocks to Invest In

3) XP Inc. (NASDAQ:XP)

% Decline on a YTD Basis: ~49.4%

Number of Hedge Fund Holders: 25

XP Inc. (NASDAQ:XP) offers financial products and services in Brazil. XP Inc. (NASDAQ:XP)’s stock has had a tough environment as a result of underperformance in its Q3 2024 revenues primarily because of slower growth in key business segments including retail investments and wealth management. The company has been witnessing a tougher economic environment in Brazil because of increased interest rates and inflationary pressures. These factors have weighed over consumer and investor sentiment.

Moving forward, XP Inc. (NASDAQ:XP)’s stock is expected to be aided by favorable demographic and economic trends. Brazil’s growing middle class and increased awareness about investment opportunities among retail investors should create long-term opportunities. Despite the modest growth outlook, Brazil is expected to add more than 6 million new households to its middle class by 2029, as per the Brazilian Chamber of Commerce. The company remains focused on becoming a leader in retail investments with the help of net new money consistency and by enhancing product offerings.

XP Inc. (NASDAQ:XP) indicated that it plans to maintain a BIS (Bank for International Settlements) ratio between 16% and 19% by 2026 and distribute more than 50% of profits in the form of dividends during the same period. Furthermore, the acquisition of Banco Modal S.A. should help XP Inc. (NASDAQ:XP) expand its client base, and enhance the ability to offer comprehensive financial solutions. Therefore, XP Inc. (NASDAQ:XP)’s strong brand recognition, customer trust, and commitment to cost management are expected to act as principal growth enablers.