The link between Warren Buffet and Cathie Woods – StoneCO. Ltd (STNE)

by admin

Brazilian payments firm StoneCo Ltd, is a leading provider of payment-processing and other financial technology services in Brazil.

It counts Warren Buffett’s Berkshire Hathaway Inc. among its backers since 2018 when the firm purchased more than 14 million shares near the IPO price, making them an 8% owner of the company.

As of November 2021 Cathie Wood’s portfolio also owns 2.662 million shares

The company shares have recently experienced a fall of more then 82.31% over the past year. Making it either a very good bargain or a very damaged company.

Possible reasons to buy :

  • The price is at an all time low, it is 48% cheaper then it’s IPO price, while the company earns 4 times more revenue.
  • Technical analysis shows an weakly 18 RSI and very low MACD.
  • The price also shows multiple gaps above 26$ (that statistically tend to fill).

Possible risks :

  • If the entire market falls, it will fall with it (despite the fact that it is oversold)
  • It’s a Brazilian fintech company (so it is exposed to political risk and currency devaluation risk)

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