Nu Holdings Ltd

Nu Holdings, a top 5 position in the portfolio for the last three years, is a leading digital financial services platform in Latin America. By combining a technology enabled low cost operating model with prudent risk management, Nu has achieved a rare combination of rapid growth and exceptional profitability. The market is focused on potential issues, but we view Nu's investments in the U.S. as modest relative to the potential opportunity. If Nu can replicate even a fraction of its success in Latin America, the U.S. business could become a meaningful driver of long-term shareholder value. At the current share price of approximately $13.50, the stock trades at 16x our 2026 earnings estimate, a valuation that we believe significantly undervalues the quality, growth, and long-term compounding potential of the business.

Nu Holdings, a top 5 position in the portfolio for the last three years, is a leading digital financial services platform in Latin America. By combining a technology enabled low cost operating model with prudent risk management, Nu has achieved a rare combination of rapid growth and exceptional profitability. The market is focused on potential issues, but we view Nu's investments in the U.S. as modest relative to the potential opportunity. If Nu can replicate even a fraction of its success in Latin America, the U.S. business could become a meaningful driver of long-term shareholder value. At the current share price of approximately $13.50, the stock trades at 16x our 2026 earnings estimate, a valuation that we believe significantly undervalues the quality, growth, and long-term compounding potential of the business.

NU Holdings Ltd. (NU) is a Brazilian company that operates Latin America’s largest fintech bank. Despite shares moving moderately lower in the quarter due to concerns about competitive pressures from advances in AI, we believe the recent weakness is largely driven by sentiment. We maintain a favorable view on NU’s long-term growth prospects, indicating confidence in its ability to navigate the evolving financial landscape.

Nu Holdings (Nu) is a perfect hold in some ways. It’s growing fast, earning great returns, and still trades at a pretty reasonable valuation. Most companies growing 30% with 30% ROEs trade at huge multiples. Nu trades at a high teens multiple of earnings. The market still treats Nu like a regular bank in Brazil and not a high-quality tech-enabled compounder. With Nu’s expansion in Mexico and Colombia, growing revenue per user in Brazil, and operating leverage, Nu is likely to keep growing earnings at 30+% for many years to come and its stock price will likely follow.