New
Why Warren Buffett Stock Nu Holdings Dived By 13% This Week
Although Warren Buffett is a justifiably celebrated and successful investor, not all of his company's holdings have soared in popularity recently. Case in point: Brazil-based fintech Nu Holdings (NYSE: NU), which according to data compiled by S&P Global Market Intelligence suffered a 13% decline in share price over this just-completed trading week. This occurred on news of a fresh asset buy and an analyst's price target cut.
A modest but impactful analyst move
Of the two news items, that cut was the more impactful. It was made by Tito Labarta, an analyst at perennially influential financial services company Goldman Sachs. Tuesday morning before market open, Labarta shaved $2 off his Nu Holdings price target for a new level of $17. On the bright side, he maintained his buy recommendation on the stock.
Where to invest $1,000 right now? Our analyst team just revealed what they believe are the 10 best stocks to buy right now. See the 10 stocks »
However, when a company is in a relatively early stage of its existence, even modest adjustments like that can have quite the impact on investor sentiment. Nu Holdings has already suffered the indignity of being sold by Buffett, whose Berkshire Hathaway trimmed its stake in the company's shares by nearly 20% earlier this year.
Berkshire still owns a pile of Nu Holdings, though, and the company continues to expand its position as a new powerhouse in its massive domestic market.
Questions of synergy with new investment?
Nu is eager to grow by acquisitions, and hungry to be a player abroad. To this end, it announced on Monday that it invested $150 million to become a minority shareholder in international banking conglomerate Tyme Group.
The company operates in the rather geographically separated markets of South Africa and the Philippines. Investors might feel that the synergies between Nu Holdings and Tyme aren't particularly strong given the geographies.
Should you invest $1,000 in Nu Holdings right now?
Before you buy stock in Nu Holdings, consider this:
The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Nu Holdings wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.
Consider when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $800,876!*
Stock Advisor provides investors with an easy-to-follow blueprint for success, including guidance on building a portfolio, regular updates from analysts, and two new stock picks each month. The Stock Advisor service has more than quadrupled the return of S&P 500 since 2002*.
*Stock Advisor returns as of December 16, 2024
Eric Volkman has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Berkshire Hathaway and Goldman Sachs Group. The Motley Fool recommends Nu Holdings. The Motley Fool has a disclosure policy.
