NU (NYSE:NU) Shares Gap Down – Should You Sell?

Nu Holdings Ltd. (NYSE:NU) shares gapped down prior to trading on Monday. The stock had previously closed at $13.59, but opened at $12.53. NU shares last traded at $12.5970, with a volume of 19,588,984 shares changing hands.

Wall Street Analysts Forecast Growth

Several research firms have commented on NU. Needham & Company LLC reissued a “buy” rating and set a $19.00 target price on shares of NU in a research note on Monday. Susquehanna increased their price objective on shares of NU from $13.00 to $16.00 and gave the company a “neutral” rating in a report on Friday, August 14th. Weiss Ratings lowered shares of NU from a “hold (c+)” rating to a “hold (c)” rating in a research note on Friday, August 21st. Bank of America reissued an “underperform” rating on shares of NU in a report on Tuesday, June 2nd. Finally, UBS Group upped their target price on NU from $16.90 to $18.20 and gave the stock a “buy” rating in a research report on Thursday, August 20th. Eight equities research analysts have rated the stock with a Buy rating, five have assigned a Hold rating and one has issued a Sell rating to the stock. Based on data from MarketBeat, the company presently has an average rating of “Moderate Buy” and a consensus target price of $18.02.

NU Price Performance

The firm has a market capitalization of $60.53 billion, a P/E ratio of 16.84, a P/E/G ratio of 0.55 and a beta of 0.94. The business’s fifty day moving average is $14.42 and its 200 day moving average is $13.89. The company has a current ratio of 0.55, a quick ratio of 0.55 and a debt-to-equity ratio of 0.35.

NU (NYSE:NU) last issued its earnings results on Tuesday, June 30th. The company reported $0.22 earnings per share for the quarter. The firm had revenue of $5.88 billion during the quarter. NU had a net margin of 18.65% and a return on equity of 31.59%. As a group, analysts forecast that Nu Holdings Ltd. will post 0.86 EPS for the current year.

NU announced that its board has authorized a stock repurchase program on Thursday, June 4th that authorizes the company to buyback $0.00 in shares. This buyback authorization authorizes the company to repurchase shares of its stock through open market purchases. Shares buyback programs are generally an indication that the company’s leadership believes its stock is undervalued.

Insiders Place Their Bets

In other news, insider Henrique Camossa Sald Fragelli sold 221,707 shares of the business’s stock in a transaction on Friday, August 14th. The stock was sold at an average price of $15.81, for a total transaction of $3,505,187.67. Following the sale, the insider directly owned 979,446 shares of the company’s stock, valued at $15,485,041.26. The trade was a 18.46% decrease in their ownership of the stock. The sale was disclosed in a document filed with the Securities & Exchange Commission, which is available at this link. Also, CEO Cristina Junqueira sold 65,000 shares of the company’s stock in a transaction on Tuesday, August 25th. The shares were sold at an average price of $14.71, for a total value of $956,150.00. Following the sale, the chief executive officer directly owned 2,542,083 shares of the company’s stock, valued at approximately $37,394,040.93. This represents a 2.49% decrease in their ownership of the stock. The disclosure for this sale is available in the SEC filing. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Insiders have sold 361,707 shares of company stock worth $5,626,338 over the last ninety days.

Institutional Trading of NU

A number of hedge funds have recently bought and sold shares of NU. Norges Bank purchased a new stake in shares of NU in the 4th quarter valued at approximately $763,792,000. Squadra Investments Gestao DE Recursos LTDA. grew its position in NU by 266.8% during the 1st quarter. Squadra Investments Gestao DE Recursos LTDA. now owns 22,312,501 shares of the company’s stock worth $320,631,000 after purchasing an additional 16,229,515 shares in the last quarter. Bank of Nova Scotia raised its stake in NU by 855.9% during the 1st quarter. Bank of Nova Scotia now owns 16,111,616 shares of the company’s stock valued at $231,524,000 after purchasing an additional 14,426,181 shares during the period. Maverick Capital Ltd. raised its stake in NU by 91.6% during the 1st quarter. Maverick Capital Ltd. now owns 22,444,311 shares of the company’s stock valued at $322,525,000 after purchasing an additional 10,729,747 shares during the period. Finally, Arrowstreet Capital Limited Partnership lifted its holdings in shares of NU by 53.7% in the fourth quarter. Arrowstreet Capital Limited Partnership now owns 28,310,084 shares of the company’s stock valued at $473,911,000 after purchasing an additional 9,893,940 shares in the last quarter. 84.02% of the stock is owned by hedge funds and other institutional investors.

About NU

Nu Holdings Ltd., operating under the Nubank brand, is a digital financial services company that provides banking, payments and credit products through mobile applications. Its offerings include digital bank accounts, credit cards, personal loans, payment services, investment products and insurance, serving consumers and small businesses.

Founded in Brazil in 2013 by David Vélez, Cristina Junqueira and Edward Wible, Nubank was established to simplify financial services and expand access to banking through technology.