5 Biggest Losers in Warren Buffett’s Latest Portfolio

3. StoneCo Ltd. (NASDAQ:STNE)

Number of Hedge Fund Holders: 35

Year-to-Date Loss as of May 20: 51.71%

StoneCo Ltd. (NASDAQ:STNE) offers financial technology solutions to businesses and vendors to conduct electronic commerce across in-store, online, and mobile channels in Brazil. Berkshire Hathaway first invested in StoneCo Ltd. (NASDAQ:STNE) in the fourth quarter of 2018, and in Q1 2022, the hedge fund owned a $125 million position in the company. As of May 20, the share price has dropped 51.71% year-to-date. 

Cantor Fitzgerald analyst Josh Siegler initiated coverage of StoneCo Ltd. (NASDAQ:STNE) on April 8 with an Overweight rating and a $15 price target. While the analyst believes that Brazilian inflation will remain high in 2022, he thinks the stock has overcorrected. The market may be overlooking StoneCo Ltd. (NASDAQ:STNE)’s ability to limit the financial expense impact via increased prepayment fees, the analyst added. 

According to Insider Monkey’s Q4 data, 35 hedge funds were long StoneCo Ltd. (NASDAQ:STNE), with collective stakes worth $892.5 million, compared to 37 funds in the last quarter, holding stakes in the company amounting to $2.2 billion. D E Shaw, in the first quarter of 2022, reported a $64.2 million stake in StoneCo Ltd. (NASDAQ:STNE). 

Here is what ClearBridge Investments Global Growth Strategy has to say about StoneCo Ltd. (NASDAQ:STNE) in its Q4 2021 investor letter:

“We also sold and trimmed several names in the emerging market and emerging growth areas, to manage risk and pursue growth companies with a better long-term risk/reward. These included Brazilian payments provider StoneCo. Having expected a rebound in their performance post a profit warning earlier in the year, rising interest rates in Brazil and investments in newly acquired companies increased operating costs and depressed earnings.”