Jim Cramer Is Bearish On These 5 Stocks

3. PagSeguro Digital Ltd. (NYSE:PAGS)

Number of Hedge Fund Holders: 23

PagSeguro Digital Ltd. (NYSE:PAGS) is headquartered in São Paulo, Brazil, and the company provides financial technology solutions and services for consumers, individual entrepreneurs, and small and medium-sized companies in Brazil and internationally. On December 22, Jim Cramer spoke about PagSeguro Digital Ltd. (NYSE:PAGS), noting: 

“We have to remember it’s from Brazil, so therefore it’s politically unstable. I hate to just be so broad-sweeping as that … These are political issues.”

On November 23, PagSeguro Digital Ltd. (NYSE:PAGS) stock traded around 19% lower after reporting a Q3 revenue of $4.04 billion, which climbed 45.3% year-over-year but fell short of analysts’ estimates.

Cantor Fitzgerald analyst Josh Siegler on December 23 lowered the price target on PagSeguro Digital Ltd. (NYSE:PAGS) to $14 from $20 and kept an Overweight rating on the shares. The analyst expects the merchant acquiring industry to come under pressure in 2023 due to the high inflationary environment and slower consumer spending in Brazil. 

According to Insider Monkey’s Q3 data, 23 hedge funds were long PagSeguro Digital Ltd. (NYSE:PAGS), compared to 24 funds in the prior quarter. Daniel Patrick Gibson’s Sylebra Capital Management is the largest stakeholder of the company, with 10.60 million shares worth $140.3 million. 

Here is what Artisan Mid Cap Fund has to say about PagSeguro Digital Ltd. (NYSE:PAGS) in its Q1 2021 investor letter:

“We also reduced our position in PagSeguro. PagSeguro is making good progress establishing a fast-growing digital bank and expanding its Brazilian payments business despite the pandemic. However, the company’s growth initiatives will require another year of heavy investment spending in 2021. This comes as Brazil’s progress combatting COVID-19 trails many major economies’, casting a cloud over the broader economic outlook. Given these potential headwinds, we trimmed our position to fund higher conviction holdings.”