- Berkshire Hathaway’s portfolio is mainly comprised of value-oriented companies, but it also contains some attractive growth stocks.
- The growing importance of analytics could make Snowflake a big long-term winner.
- Macroeconomic and regulatory headwinds in Latin America have created the opportunity to invest in a promising financial services firm at a steep discount.
When Warren Buffett bought a majority stake in Berkshire Hathaway and became the company’s CEO in 1965, the company’s stock was trading for around $ 19 per share. Today, Berkshire Hathaway’s Class A shares are trading at around $ 519,500 per share. This means that if you were lucky enough to hold a $ 1,000 stake in Berkshire when Buffett took over the company and held your position, it would be worth more than $ 27.3 million today.
Buffett is best known as a value investor, but there are also growth-oriented holdings in Berkshire Hathaway’s stock portfolio and the company’s incredible track record suggests that investors should take a close look at which companies the Oracle of. Omaha has invested its money. He reads on for a look at two growing stocks in Berkshire Hathaway’s portfolio that have fallen sharply and have the potential for explosive returns.
Buffett said it can be difficult to get fair prices for shares when they go public, but the Berkshire team obviously saw a special situation at Snowflake (NASDAQ: SNOW), -0.46%. The investment conglomerate bought millions of shares in the data services firm in its September 2020 IPO, and the bull market likely has a lot to do with the growing importance of data analytics.
Snowflake provides a marketplace for buying and selling data and a data warehousing service that allows companies to access information from multiple cloud sources in one place. By analyzing large amounts of data, companies and institutions can gain valuable insights that help companies improve their efficiency and open up new opportunities. The data services company makes it easier for users to access a wider range of information.
The company’s customer growth rate makes it clear that organizations see Snowflake’s services as essential to their performance and growth. As the chart below shows, Snowflake’s main and total customers are growing at a fantastic rate – 44% more year-on-year.
SOURCE OF IMAGE: SNOWFLAKE
The momentum on these fronts is all the more encouraging when you consider customer spending trends. In the last quarter, customers already using the Snowflake platform increased the company’s service spend by 78% compared to the same period last year.
Snowflake stock is currently around 61% below its peak, but there is a good chance it can recover and reach new highs. For growth-oriented investors, this is a company that has what it takes to generate great returns.
2. Stone Co
Brazilian financial services firm StoneCo (NASDAQ: STNT), -3.45%, was down about 89% from its peak in February 2021. While the company’s payment processing business continued to perform well in the ‘last year, regulatory changes and macroeconomic issues have worsened the outlook for the company’s credit and lending business.
One argument against StoneCo is that the Brazilian government has recently introduced new lending standards. This, coupled with high inflation, has led StoneCo to suffer significant losses on the loans it originates. To counter this, the company stopped lending to small and medium-sized businesses.
As large corporations typically have a wider range of financing options and less need for StoneCo’s offerings, these developments have dealt a severe blow to the company’s lending business. On the other hand, there remain promising growth prospects for the payment processing services that StoneCo offers to business customers. And after the hasty sale, the stock appears interestingly priced.
StoneCo posted a record fourth quarter addition of 378,000 customers, bringing its active retail partner tally to 1.8 million. The total adjusted payment volume processed through the company’s platform in the fourth quarter of 2021 increased 55% year-on-year to reach $ 88.7 billion in local currency and $ 19.2 billion in US dollars.
There is still good news for investors, as there is a lot of potential for further long-term growth. Check out this forecast for ecommerce user growth in Latin America and the Caribbean through 2025.
As e-commerce continues to grow in Latin America, the demand for payment processing services will also grow. Currently, the company’s business focuses mainly on Brazil, the largest economy in the region, but there is an opportunity to expand into other markets as well.
With a market capitalization of approximately $ 3.2 billion and a price of 1.8 times forward sales and 28 times forward earnings, StoneCo shares have great potential.
Article 2 Warren Buffett Growth Stocks Down 61% and 89% to Buy Now first appeared in The Motley Fool Germany.
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This article represents the author’s opinion, which may differ from the “official” recommendation position of a premium Motley Fool consulting service. Challenging an investment thesis, even one of yours, helps all of us think critically about investments and make decisions that help us become smarter, happier, and richer. It has been translated so that our German readers can join the discussion. Keith Noonan owns Stoneco LTD. The Motley Fool owns shares and recommends Berkshire Hathaway (B shares), Snowflake Inc. and Stoneco LTD. The Motley Fool recommends the following options: long January 2023 $ 200 call on Berkshire Hathaway (B shares), short January 2023 $ 200 put on Berkshire Hathaway (B shares) and short January 2023 $ 265 call on Berkshire Hathaway (B shares).
Motley Fool Deutschland 2022
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