NU Sees Unusually Large Options Volume (NYSE:NU)

Nu Holdings Ltd. (NYSE:NU) was the recipient of some unusual options trading activity on Tuesday. Traders bought 256,538 call options on the stock. This represents an increase of approximately 211% compared to the average daily volume of 82,486 call options.

Key Stories Impacting NU

Here are the key news stories impacting NU this week:

• Positive Sentiment: Goldman Sachs reiterated its view that NU shares could potentially double, offering an important bullish counterpoint to the recent decline. Goldman Sachs NU outlook
• Positive Sentiment: Unusually strong options activity may be supporting the stock: traders purchased 256,538 NU call options, 211% above average daily call volume. This signals increased speculative interest, although it does not guarantee future gains.
• Positive Sentiment: Needham reaffirmed its Buy rating and maintained a $19 price target, implying substantial upside from recent levels. Analysts cited the selloff as a potential long-term buying opportunity. Needham buying opportunity analysis
• Positive Sentiment: A recent investment analysis maintained a Buy view, highlighting 55% year-over-year revenue growth, 66% net-income growth, a roughly 33% return on equity, rising average revenue per customer, and continued user expansion across Latin America. Nu Holdings growth analysis

NU Stock Performance

NYSE NU traded up $0.14 during trading on Tuesday, hitting $12.37. 77,685,610 shares of the company’s stock traded hands, compared to its average volume of 63,067,410. The stock has a market capitalization of $60.08 billion, a price-to-earnings ratio of 16.72, a PEG ratio of 0.55 and a beta of 0.94. The company has a debt-to-equity ratio of 0.35, a quick ratio of 0.55 and a current ratio of 0.55. The business has a 50 day moving average of $14.38 and a 200-day moving average of $13.87. NU has a 12-month low of $11.20 and a 12-month high of $18.98.

NU (NYSE:NU) last posted its quarterly earnings results on Tuesday, June 30th. The company reported $0.22 earnings per share (EPS) for the quarter. NU had a net margin of 18.65% and a return on equity of 31.59%. The company had revenue of $5.88 billion for the quarter. As a group, equities research analysts anticipate that NU will post 0.86 earnings per share for the current fiscal year.

NU declared that its board has approved a share buyback program on Thursday, June 4th that authorizes the company to repurchase $0.00 in shares. This repurchase authorization authorizes the company to repurchase shares of its stock through open market purchases. Shares repurchase programs are usually a sign that the company’s board of directors believes its shares are undervalued.

Analyst Upgrades and Downgrades

Several equities analysts recently weighed in on NU shares. Needham & Company LLC restated a “buy” rating and set a $19.00 price target on shares of NU in a research report on Monday. Susquehanna boosted their target price on shares of NU from $13.00 to $16.00 and gave the company a “neutral” rating in a research note on Friday, August 14th. Rothschild & Co Redburn set a $19.00 target price on shares of NU in a research report on Monday. Wolfe Research decreased their price target on shares of NU from $18.00 to $17.00 and set an “outperform” rating for the company in a research note on Tuesday, August 25th. Finally, UBS Group lifted their price target on shares of NU from $16.90 to $18.20 and gave the stock a “buy” rating in a report on Thursday, August 20th. Eight equities research analysts have rated the stock with a Buy rating, five have given a Hold rating and one has assigned a Sell rating to the stock. According to MarketBeat.com, the company presently has a consensus rating of “Moderate Buy” and a consensus target price of $18.02.

Insider Activity at NU

In other news, CEO Cristina Junqueira sold 65,000 shares of the company’s stock in a transaction that occurred on Tuesday, August 25th. The stock was sold at an average price of $14.71, for a total value of $956,150.00. Following the completion of the transaction, the chief executive officer directly owned 2,542,083 shares of the company’s stock, valued at $37,394,040.93. This represents a 2.49% decrease in their ownership of the stock. The transaction was disclosed in a legal filing with the SEC, which is available at this hyperlink. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Also, insider Henrique Camossa Sald Fragelli sold 221,707 shares of the stock in a transaction that occurred on Friday, August 14th. The shares were sold at an average price of $15.81, for a total value 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 SEC filing for this sale provides additional information. In the last three months, insiders have sold 361,707 shares of company stock worth $5,626,338.

Institutional Trading of NU

Hedge funds and other institutional investors have recently made changes to their positions in the stock. Dimensional Fund Advisors LP lifted its holdings in shares of NU by 990.3% in the first quarter. Dimensional Fund Advisors LP now owns 298,789 shares of the company’s stock worth $4,294,000 after buying an additional 271,385 shares in the last quarter. Handelsbanken Fonder AB grew its stake in NU by 5.6% during the second quarter. Handelsbanken Fonder AB now owns 2,770,572 shares of the company’s stock valued at $37,015,000 after acquiring an additional 146,764 shares in the last quarter. The Manufacturers Life Insurance Company increased its holdings in NU by 8.9% during the 1st quarter. The Manufacturers Life Insurance Company now owns 904,485 shares of the company’s stock worth $12,997,000 after acquiring an additional 73,818 shares during the period. Deepwater Asset Management LLC lifted its stake in NU by 11.9% in the 4th quarter. Deepwater Asset Management LLC now owns 997,890 shares of the company’s stock worth $16,705,000 after purchasing an additional 105,994 shares in the last quarter. Finally, Mawer Investment Management Ltd. boosted its holdings in NU by 578.0% in the 4th quarter. Mawer Investment Management Ltd. now owns 4,585,720 shares of the company’s stock valued at $76,765,000 after purchasing an additional 3,909,320 shares during the period. 84.02% of the stock is currently owned by institutional investors.

NU Company Profile

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

Nubank was founded in 2013 by David Vélez, Cristina Junqueira and Edward Wible with the goal of expanding access to simpler, lower-cost financial services through technology.