We recently published a list of Growth Stock Portfolio: 12 Stock Picks By Warren Buffett. In this article, we are going to take a look at where Nu Holdings Ltd. (NYSE:NU) stands against other growth stock picks by Warren Buffett.
Warren Buffett’s Berkshire Hathaway portfolio has long been a beacon for value investors looking for high-quality businesses with long-term competitive advantages. Since taking over as CEO of Berkshire six decades ago, the appropriately named “Oracle of Omaha” has outperformed the broader market.
As we approach 2025, some of Berkshire’s assets stand out as promising opportunities, combining excellent fundamentals with acceptable values despite the market’s sustained emphasis on technology and growth stocks.
Berkshire’s CEO is a strong believer in portfolio concentration. Buffett’s investment strategy revolves around choosing companies with significant competitive advantages, effective management teams, and the potential to create regular free cash flow. His concept focuses on buying exceptional firms at acceptable costs rather than inferior enterprises at low rates. This strategy has proven successful across numerous market cycles, with Berkshire Hathaway providing compound yearly returns significantly higher than market averages over several decades.
The “Oracle of Omaha” concentrates on companies he understands, avoiding complex technologies or models with uncertain earnings potential. He looks for companies with pricing power, great brand awareness, and the ability to preserve or grow market share even during economic downturns. Buffett’s conservative yet effective approach has helped him become one of history’s most successful investors.
Following the filing of Berkshire’s 13F on February 14, we now know that 60% ($180 billion) of Buffett’s $299 billion portfolio is concentrated in just four magnificent stocks.
Japanese stock investors are attentively watching Buffett’s letter in the hopes of gaining information that may affect the country’s trading houses. Buffett has previously approved Japanese trading companies, resulting in increased stock value. Market participants will examine his comments for clues about the future of these companies, particularly as they are impacted by decreasing energy prices and pressure from the US government to reduce oil expenses.
As usual, Buffett’s shareholder letter is expected to provide significant insights not only into Berkshire Hathaway’s performance but also into market trends.
A wide angle shot of a team of bankers and financial advisors evaluating an investment portfolio on a touchscreen monitor.
Methodology
For this article, we scanned Warren Buffett’s Q4 2024 portfolio. We then chose 12 stocks with the highest 5-year average revenue growth (YoY) and ranked accordingly.
Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 373.4% since May 2014, beating its benchmark by 218 percentage points (see more details here).
Nu Holdings Ltd. (NYSE:NU)
5-year average revenue growth (YoY): 103.36%
Warren Buffett’s Growth Stock Portfolio includes Nu Holdings Ltd. (NYSE:NU). The business of the firm is offering online banking services. It provides several financial services, including business accounts, rewards, investments, personal loans, credit cards, insurance, and mobile payments. The company’s primary source of revenue is Brazil.
In the third quarter of 2024, Nu Holdings Ltd. (NYSE:NU)’s revenues surged by 56% year on year on an FX-neutral basis, establishing a new record of $2.9 billion. The firm doubled its customer base in the last year, reaching 10 million in January, five years after its Mexican launch. Nearly 12% of Mexico’s adult population is currently impacted by its expanded offers since its introduction, which now include a credit card, a debit card, a savings account with Cajitas (Money Boxes), and personal loans. The company said in the same month that NuCel, which was introduced in October of last year, had grown its clientele. Soon, Brazilian users will be able to purchase the product, receive notifications, and digitally transfer their numbers through the NuCel tab of the Nu app.
As the company tackles major issues that banking consumers in the area encounter, such as exorbitant fees, subpar customer service, and restricted access to financial goods, investors continue to have faith in Nu Holdings Ltd. (NYSE:NU) growth possibilities. They believe it will continue to increase its market share in the huge and expanding Latin American market due to its exceptional product offering.
Overall, NU ranks 1st on our list of Growth Stock Portfolio: 12 Stock Picks By Warren Buffett. While we acknowledge the potential for NU to grow, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than NU but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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Disclosure: None. This article is originally published at Insider Monkey.
