PagSeguro (PAGS) is Aiming for 16%+ EPS Growth

Middle Coast Investing, an investment advisor firm, released its fourth-quarter 2025 investor letter. 2025 was a good year for the firm as well as for the broader market. A copy of the letter can be downloaded here. Stock markets tend to rise but often revert to their historical average. For the past three years, the S&P 500 has reported a 21.2% annualized return, which is above the mean. So, the signs of slowing growth have already been evident. The firm always focuses on investing in good companies at fair prices. In Q4 2025, the US Portfolios returned 2.7% compared to 2.3% for the S&P 500. It’s Core U.S. portfolios returned 1.9% while the Russell 2000 returned 1.9%, the S&P 600 returned 1.3% and the Nasdaq generated 2.6% for the same period. Also, its European Portfolios fell by -0.4%. In addition, please check the Fund’s top five holdings to know its best picks in 2025.

In its fourth-quarter 2025 investor letter, Middle Coast Investing highlighted stocks such as PagSeguro Digital Ltd. (NYSE:PAGS). PagSeguro Digital Ltd. (NYSE:PAGS) is a Brazil-based financial and payment solutions provider. On January 13, 2026, PagSeguro Digital Ltd. (NYSE:PAGS) stock closed at $10.13 per share. One-month return of PagSeguro Digital Ltd. (NYSE:PAGS) was 8.46%, and its shares gained 46.39% of their value over the last 52 weeks. PagSeguro Digital Ltd. (NYSE:PAGS) has a market capitalization of $2.957 billion.

Middle Coast Investing stated the following regarding PagSeguro Digital Ltd. (NYSE:PAGS) in its fourth quarter 2025 investor letter:

“I mentioned the top-down concept of diversify from US holdings. This is the rare case where I have been working top-down, looking for non-US stocks to mix in to our portfolio, and it took till Q4 to find one I liked

PagSeguro Digital Ltd. (NYSE:PAGS) is a payment and fintech business based in Brazil. It is trying to build a full digital bank business. Brazil is still a large, developing country with more and more people getting into banking. The new Pix payment system makes it easier to use banking services – it’s a free peer to peer money transfer system run by the central bank. This on the one hand eats at a payment company’s margins/business, and on the other hand may increase the TAM for PagSeguro’s business.

The stock was up in 2025, but still trades very cheap. Analysts focus on classic payments platform metrics, such as TPV, while PagSeguro focuses on gross profit, which has gone up. The company is targeting 16%+ EPS growth, which would be impressive, and is also about to pay out a 8-9% dividend next year which isn’t properly being reported (most sites and brokerages show it as having a 1.4% yield)”

PagSeguro (PAGS) Drops 8.86% as Analysts Expect Q2 Earnings Fall

PagSeguro Digital Ltd. (NYSE:PAGS) is not on our list of 30 Most Popular Stocks Among Hedge Funds. According to our database, 31 hedge fund portfolios held PagSeguro Digital Ltd. (NYSE:PAGS) at the end of the third quarter, up from 27 in the previous quarter. While we acknowledge the risk and potential of PagSeguro Digital Ltd. (NYSE:PAGS) as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than PagSeguro Digital Ltd. (NYSE:PAGS) and that has 10,000% upside potential, check out our report about this cheapest AI stock.

In another article, we covered PagSeguro Digital Ltd. (NYSE:PAGS) and shared the list of cheap rising stocks to invest in. In addition, please check out our hedge fund investor letters Q4 2025 page for more investor letters from hedge funds and other leading investors.

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