XP, BTG E NUBANK: POR QUE INVESTIR NOS TRÊS?

Episode Overview

• An analysis of investment strategies within the Brazilian financial sector, comparing fintechs and neobanks to traditional incumbent banks.
• A deep dive into the rationale for holding multiple fintech players like XP, BTG, and Nubank simultaneously in a portfolio.
• Discussion on the specific investment theses for BTG, Nubank (including its operations in Brazil and Mexico), and Stone.
• The impact of macroeconomic factors, such as interest rates and economic growth, on the performance and valuation of these financial companies.

Key Concepts

• Portfolio Diversification within Fintech: The guest explains the strategy of investing in multiple key players in the fintech space (XP, BTG, Nubank) rather than choosing just one, adjusting position sizes based on current scenarios and company performance.
• Nubank's "Low and Grow" Strategy: The discussion highlights Nubank's approach to credit, starting with small limits for new customers and gradually increasing them as they demonstrate good payment behavior. This allows the company to manage risk while building a loyal and engaged customer base.
• Cost Structure as a Competitive Advantage: A central theme is that Nubank's extremely low operational cost is its primary advantage, enabling it to profitably serve low-income clients that are too expensive for traditional banks to service effectively.
• Capital Distribution and Valuation: The case for Stone is partly built on its low valuation (trading at 8 times forward earnings) and its significant potential for capital distribution to shareholders through dividends or buybacks, fueled by its excess capital and the sale of Linx.
• Distinct Investment Narratives: The guest differentiates the investment theses for the companies. BTG and XP are viewed as more sensitive to favorable macroeconomic and political scenarios, while Nubank and Stone are driven more by their individual, micro-level growth stories and operational execution.

Quotes

• At 00:40 - "você não escolheu um, você escolheu os três, né? Você tem XP, BTG e Nubank." - The interviewer, Lucas Collazo, points out the unusual strategy of holding all three major fintech players instead of picking a single preferred name, setting the stage for the discussion on diversification within the sector.
• At 02:23 - "A estratégia do 'low and grow', né? Você dá um limite pequeno, a medida que esse cliente vai te pagando, vai... se engajando na sua base... você vai entendendo melhor ele e você vai conseguindo aumentar esse limite." - The guest, Luiz Constantino, explains Nubank's successful credit management strategy, which allows it to expand its portfolio while controlling risk.
• At 03:48 - "Mostra que só o diferencial de custo é o que faz uma... tira retorno versus uma carteira muito rentável." - Luiz Constantino emphasizes that Nubank's low-cost structure is the crucial factor that makes its business model highly profitable, even when serving a low-income customer base that would be unprofitable for traditional banks.

Takeaways

• Consider diversifying investments within a disruptive sector rather than betting on a single winner. Holding key players like XP, BTG, and Nubank can capture different growth drivers and mitigate risks associated with a single company's execution.
• Evaluate the fundamental cost structure of a business, especially in the financial sector. A significant cost advantage, like Nubank's, can be a powerful and sustainable moat, allowing a company to profitably capture market segments ignored by incumbents.
• Look for companies with strong potential for capital return, especially when they trade at attractive valuations. Stone is highlighted as an example where excess capital from operations and asset sales could lead to significant buybacks or dividends, creating value for shareholders.