Sands Capital, an investment management company, released its “Sands Capital Select Growth Fund” Q4 2024 investor letter. A copy of the same can be downloaded here. Select Growth primarily targets U.S. companies that are leading the way in crucial areas of positive structural transformation within the economy. The fund returned 8.8% (net) in the fourth quarter compared to 7.1% return for the benchmark, the Russell 1000 Growth Index. The fund returned 24.3% over the one year period compared to 33.4% return for the Index. You can check the fund’s top 5 holdings to know more about its best picks for 2024.
In its fourth quarter 2024 investor letter, Sands Capital Select Growth Fund emphasized stocks such as Nu Holdings Ltd. (NYSE:NU). Nu Holdings Ltd. (NYSE:NU) is a digital banking platform provider, with a market capitalization of $49.219 billion. The one-month return of Nu Holdings Ltd. (NYSE:NU) was -2.10%, and its shares lost 13.66% of their value over the last 52 weeks. On March 31, 2025, Nu Holdings Ltd. (NYSE:NU) stock closed at $10.24 per share.
Sands Capital Select Growth Fund stated the following regarding Nu Holdings Ltd. (NYSE:NU) in its Q4 2024 investor letter:
“Nu Holdings Ltd. (NYSE:NU) shares fell in the fourth quarter along with the broader drop in Brazilian equities. Nu is vulnerable, in our view, to downward revisions to earnings estimates in the near term if Brazil’s economy deteriorates, due to either higher credit losses or slower credit origination. In addition, we and the market continue to debate whether Nu’s recently reported slowdown in credit card growth was attributable to product saturation or cautious credit management.
Despite the near-term concerns, Nu continues to be a strong fit with our criteria. Earnings growth within its core market of Brazil relies on its ability to expand upon its existing customer relationships rather than customer acquisition. Nubank now has over 100 million customers in Brazil and is the primary banking relationship for nearly one-third of all Brazilian adults. Within this significant footprint, market shares in credit cards (16 percent), personal loans (9 percent), and secured loans (approximately 1 percent) suggest significant room for growth.
Meanwhile, in 2024’s third quarter, Nu achieved a 30 percent return on equity—a record high—even when accounting for its loss-making newer markets, such as Colombia and Mexico. Nubank remained the most profitable large consumer bank in Brazil. Nu ended 2024 trading at 18 times forward earnings, its lowest valuation as a public company.”
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Nu Holdings Ltd. (NYSE:NU) is not on our list of 30 Most Popular Stocks Among Hedge Funds. As per our database, 79 hedge fund portfolios held Nu Holdings Ltd. (NYSE:NU) at the end of the fourth quarter which was 54 in the previous quarter. While we acknowledge the potential of Nu Holdings Ltd. (NYSE:NU) as an investment, 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 as promising as NVIDIA but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
We covered Nu Holdings Ltd. (NYSE:NU) in another article, where we shared the list of best emerging markets stocks to buy according to hedge funds. In addition, please check out our hedge fund investor letters Q4 2024 page for more investor letters from hedge funds and other leading investors.
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Disclosure: None. This article is originally published at Insider Monkey.