Here’s What Makes StoneCo (STNE) a Great Investment Choice

Argosy Investors, an investment management firm, published its first-quarter 2022 investor letter – a copy of which can be downloaded here. The fund’s 2022 first-quarter performance was -15.1% in select accounts. The S&P 500 by comparison returned -4.4%. Argosy ended the quarter with 43% of the portfolio in cash and equivalents, which means that these results would have been worse without the allocation to cash. Try to spend some time taking a look at the fund’s top 5 holdings to be informed about their best picks for 2022.

In its Q1 2022 investor letter, Argosy Investors mentioned StoneCo Ltd. (NASDAQ:STNE) and explained its insights for the company. Founded in 2000, StoneCo Ltd. (NASDAQ:STNE) is a Cayman Islands-based financial technology solutions provider with a $2.5 billion market capitalization. StoneCo Ltd. (NASDAQ:STNE) delivered a -51.96% return since the beginning of the year, while its 12-month returns are down by -88.14%. The stock closed at $8.10 per share on June 20, 2022.

Here is what Argosy Investors has to say about StoneCo Ltd. (NASDAQ:STNE) in its Q1 2022 investor letter:

“StoneCo (NASDAQ:STNE) has, like Vizio, seen a dramatic decline in value since adding to the investment during the first quarter. I added to the position early in the year after STNE had dropped significantly due to challenges in their credit portfolio, which they have changed, as well as increasing interest rates in Brazil, which the company was slow to incorporate into their pricing. Despite these changes which should benefit STNE later in the year, the market in general has obviously continued to struggle and emerging markets stocks have been hit even harder in many cases. Expectations are very low for the company now, and there is a good case to be made that the business could be worth much more than current prices a couple of years from now.”

Our calculations show that StoneCo Ltd. (NASDAQ:STNE) fell short and didn’t make it on our list of the 30 Most Popular Stocks Among Hedge Funds. StoneCo Ltd. (NASDAQ:STNE) was in 43 hedge fund portfolios at the end of the first quarter of 2022, compared to 35 funds in the previous quarter. StoneCo Ltd. (NASDAQ:STNE) delivered a -40.66% return in the past 3 months.

In May 2022, we also shared another hedge fund’s views on StoneCo Ltd. (NASDAQ:STNE) in another article. You can find other investor letters from hedge funds and prominent investors on our hedge fund investor letters 2022 Q1 page.

Disclosure: None. This article is originally published at Insider Monkey.