StoneCo Ltd. The Square Of Brazil

Financial technology or fintech for short, is the new technology that aims to compete with the traditional banking industry in delivering / selling financial services and solutions to customers.  When I think of Fintech, I immediately think of Paypal and Square.

Square Is No Circle

StoneCo Ltd. provides financial technology solutions that empower merchants and integrated partners to conduct electronic commerce across in-store, online, and mobile channels in Brazil.  StoneCo, a payment processing company based in Brazil that went public last October.

Credit and debit card transactions in Brazil grew 14.7% in the third quarter from a year earlier, as more Brazilians used cards to pay for goods and services, industry group Abecs said on Thursday.  Debit and credit card transactions totaled 391.1 billion reais ($101.44 billion) between July and September.


StoneCo reported fourth quarter and 2018 fiscal year results on Monday.  Total revenue and income increased 113.7% year over year.  Net Iincome was R$155.9 million in the fourth quarter of 2018, compared to R$20.9 million in the fourth quarter of 2017, an increase of 646.3%.   The number of active clients increased by 136.7 thousand in fiscal year 2018, reaching a total of 267.9 thousand clients at the end of the year, up 104.1% compared to 2017.

On the news, the stock price popped and continued into the trading day today.

In additional StoneCo has the backing of some heavy hitters on Wall Street and Omaha, NE.

Warren Buffett’s Berkshire Hathaway (BRKB) currently holds the second largest stake with 11.8% of its shares. The biggest holder of share is T. Rowe Price Associates with a 24.1% stake. Several Fidelity funds are stakeholders as well.

With fintech being such a nascent industry, StoneCo is just getting started.  The chart suggests price has plenty of room to rise.

This post is my personal opinion. I’m not a financial advisor, this isn’t financial advise. Do your own research before making investment decisions.

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