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Nu Holdings Ltd. (NU - Free Report) , a Zacks Rank #1 (Strong Buy), is an international provider of digital banking services. NU shares are widely outperforming the market this year with the backing of a leading industry group. The stock is hitting a series of 52-week highs and displaying relative strength as buying pressure accumulates in this highly-ranked stock.
Operating at the intersection of technology and financial services, Nu Holdings is part of the Zacks Technology Services industry group. This group ranks in the top 38% out of more than 250 Zacks Ranked Industries. Because it is ranked in the top half of all Zacks Ranked Industries, we expect this group to outperform the market over the next 3 to 6 months. The industry has been steadily outperforming the market this year with a 25.7% return. Also note the favorable characteristics for this group below:
Image Source: Zacks Investment Research
Historical research studies suggest that approximately half of a stock’s price appreciation is due to its industry grouping. In fact, the top 50% of Zacks Ranked Industries outperforms the bottom 50% by a factor of more than 2 to 1. It’s no secret that investing in stocks that are part of leading industry groups can give us a leg up relative to the market. By focusing on leading stocks within the top 50% of Zacks Ranked Industries, we can dramatically improve our stock-picking success.
Company Description
Nu Holdings provides digital financial services in Brazil, Mexico, Columbia, as well as internationally. The company offers credit and debit cards, mobile payment solutions, and savings solutions for individuals and businesses.
In addition, the company offers NuCrypto, which enables the buying and selling of cryptocurrencies through the Nu app; NuInvest, an investment product that provides equity, fixed-income, options and ETF products; and NuInsurance, an insurance offering that helps customers secure life insurance and funeral benefits. Nu Holdings was founded in 2013 and is headquartered in Sao Paulo, Brazil.
Earnings Trends and Future Estimates
NU has built up an impressive earnings history, surpassing earnings estimates in each of the last four quarters. Back in August, the company reported second-quarter earnings of $0.06/share, a 50% surprise over the $0.04/share consensus estimate. NU has delivered a trailing four-quarter average earnings surprise of 120.83%.
Analysts covering NU are in agreement and have been increasing their earnings estimates as of late. For the current fiscal year, analysts have increased earnings estimates by 23.53% in the past 60 days. The 2023 Zacks Consensus EPS Estimate now stands at $0.21/share, reflecting a staggering potential growth rate of 425% relative to the prior year. Revenues are projected to surge 61.9% to $7.76 billion.
Image Source: Zacks Investment Research
Let’s Get Technical
NU shares have advanced nearly 95% this year. This is the kind of stock we want to include in our portfolio – one that is trending well and receiving positive earnings estimate revisions.
Image Source: StockCharts
Notice how the 200-day (red line) moving average is sloping up. The stock has been making a series of higher highs and recently climbed back above its 50-day moving average (blue line). With both strong fundamentals and technicals, NU is poised to continue its outperformance.
Empirical research shows a strong correlation between near-term stock movements and trends in earnings estimate revisions. As we know, Nu Holdings has recently witnessed positive revisions. As long as this trend remains intact (and NU continues to deliver earnings beats), the stock will likely continue its bullish run into the end of this year and beyond.
Bottom Line
The future looks bright for this highly-ranked, leading stock. Momentum has picked up in October as the market attempts to regain its footing.
Backed by a leading industry group and impressive history of earnings beats, it’s not difficult to see why this company is a compelling investment. Robust fundamentals combined with an appealing technical trend certainly justify adding shares to the mix.
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Bull of the Day: Nu Holdings Ltd. (NU)
Nu Holdings Ltd. (NU - Free Report) , a Zacks Rank #1 (Strong Buy), is an international provider of digital banking services. NU shares are widely outperforming the market this year with the backing of a leading industry group. The stock is hitting a series of 52-week highs and displaying relative strength as buying pressure accumulates in this highly-ranked stock.
Operating at the intersection of technology and financial services, Nu Holdings is part of the Zacks Technology Services industry group. This group ranks in the top 38% out of more than 250 Zacks Ranked Industries. Because it is ranked in the top half of all Zacks Ranked Industries, we expect this group to outperform the market over the next 3 to 6 months. The industry has been steadily outperforming the market this year with a 25.7% return. Also note the favorable characteristics for this group below:
Image Source: Zacks Investment Research
Historical research studies suggest that approximately half of a stock’s price appreciation is due to its industry grouping. In fact, the top 50% of Zacks Ranked Industries outperforms the bottom 50% by a factor of more than 2 to 1. It’s no secret that investing in stocks that are part of leading industry groups can give us a leg up relative to the market. By focusing on leading stocks within the top 50% of Zacks Ranked Industries, we can dramatically improve our stock-picking success.
Company Description
Nu Holdings provides digital financial services in Brazil, Mexico, Columbia, as well as internationally. The company offers credit and debit cards, mobile payment solutions, and savings solutions for individuals and businesses.
In addition, the company offers NuCrypto, which enables the buying and selling of cryptocurrencies through the Nu app; NuInvest, an investment product that provides equity, fixed-income, options and ETF products; and NuInsurance, an insurance offering that helps customers secure life insurance and funeral benefits. Nu Holdings was founded in 2013 and is headquartered in Sao Paulo, Brazil.
Earnings Trends and Future Estimates
NU has built up an impressive earnings history, surpassing earnings estimates in each of the last four quarters. Back in August, the company reported second-quarter earnings of $0.06/share, a 50% surprise over the $0.04/share consensus estimate. NU has delivered a trailing four-quarter average earnings surprise of 120.83%.
Analysts covering NU are in agreement and have been increasing their earnings estimates as of late. For the current fiscal year, analysts have increased earnings estimates by 23.53% in the past 60 days. The 2023 Zacks Consensus EPS Estimate now stands at $0.21/share, reflecting a staggering potential growth rate of 425% relative to the prior year. Revenues are projected to surge 61.9% to $7.76 billion.
Image Source: Zacks Investment Research
Let’s Get Technical
NU shares have advanced nearly 95% this year. This is the kind of stock we want to include in our portfolio – one that is trending well and receiving positive earnings estimate revisions.
Image Source: StockCharts
Notice how the 200-day (red line) moving average is sloping up. The stock has been making a series of higher highs and recently climbed back above its 50-day moving average (blue line). With both strong fundamentals and technicals, NU is poised to continue its outperformance.
Empirical research shows a strong correlation between near-term stock movements and trends in earnings estimate revisions. As we know, Nu Holdings has recently witnessed positive revisions. As long as this trend remains intact (and NU continues to deliver earnings beats), the stock will likely continue its bullish run into the end of this year and beyond.
Bottom Line
The future looks bright for this highly-ranked, leading stock. Momentum has picked up in October as the market attempts to regain its footing.
Backed by a leading industry group and impressive history of earnings beats, it’s not difficult to see why this company is a compelling investment. Robust fundamentals combined with an appealing technical trend certainly justify adding shares to the mix.