1. StoneCo Ltd. (NASDAQ:STNE)
Berkshire Hathaway’s Stake Value: $371,346,000
Percentage of Berkshire Hathaway’s 13F Portfolio: 0.12%
Number of Hedge Fund Holders: 37
Loss in 2021: 79.43%
Berkshire Hathaway portfolio holds 43 distinguished stocks, and StoneCo Ltd. (NASDAQ:STNE) reported the worst performance comparatively, with the loss in 2021 totaling 79.43%. StoneCo Ltd. (NASDAQ:STNE) is a fintech company offering cloud-based financial solutions.
Buffett bought a stake in StoneCo Ltd. (NASDAQ:STNE) in Q4 2018, and kept his position constant until Q1 2021, when he reduced his shares from 14.1 million to 10.6 million. As of the third quarter of 2021, Buffett owns a $371.3 million position in StoneCo Ltd. (NASDAQ:STNE).
On November 16, after StoneCo Ltd. (NASDAQ:STNE)’s Q3 results were announced, the stock dipped 6.7% in after-hours trading since the bottom line reflected increased investment in operations and a fair value adjustment on equity securities. The Q3 EPS also missed market consensus estimates, and dropped as compared to the prior-year quarter.
UBS analyst Kaio Prato downgraded StoneCo Ltd. (NASDAQ:STNE) on January 4 to Neutral from Buy with a price target of $21, down from $47. The analyst believes that 2022 will be challenging for StoneCo Ltd. (NASDAQ:STNE), as the company has too many points to focus on, including the credit business turnaround, price increases for merchants to at least partially offset higher funding costs, and an environment of intense competition.
Billionaire Stephen Mandel’s Lone Pine Capital is the leading StoneCo Ltd. (NASDAQ:STNE) stakeholder as of Q3 2021, with over 15 million shares worth $524 million. Overall, 37 hedge funds were bullish on the stock in the third quarter.
Here is what ClearBridge International Growth EAFE Strategy has to say about StoneCo Ltd. (NASDAQ:STNE) in its Q3 2021 investor letter:
“Brazil is another emerging markets focus for the Strategy and here we were hurt by payments company StoneCo. The stock sold off primarily due to surprise write-downs in its lending business, which began in the first quarter and continued into the second and have weighed on earnings. Lending is a relatively new business for StoneCo but was expected to be a substantial growth driver. Non-performing loans increased in the first quarter largely at merchants heavily impacted by COVID-19 lockdowns. Technical issues have caused delays in the government’s launch of a nationwide receivable marketplace, compounding the negative impacts on new business profitability. Stone, in turn, has halted lending until that marketplace opens. We believe the worst of the write-downs are behind us and core company fundamentals remain solid.”
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