If you think you know Warren Buffett, you might want to check out some of the stocks he owns. The legendary investor has stakes in Brazilian fintech Nu (NU 1.82%) and Florida homebuilder Lennar (LEN -0.50%) in Berkshire Hathaway‘s (BRK.A 1.06%) (BRK.B 1.20%) stock portfolio.
Berkshire Hathaway is notable for its large stock price, but you can buy into many of the names in its stock portfolio for just a small investment. Here’s why Nu and Lennar could be interesting Buffett stocks to consider buying with as little as $300.
1. Nu
One of the more surprising — and, dare I say, impressive — stakes among Berkshire Hathaway’s portfolio of dozens of stocks is Nu. The parent company of Brazil’s Nubank launched just a decade ago, but it has already exploded to more than 90 million accounts across three Latin American countries. It hit an impressive milestone in its latest quarter: More than half of Brazilian adults now have an account with Nu.
Nu started as just another fintech stock, arming young Brazilians with tech-forward credit cards before moving on to personal loans and bank accounts. It has expanded lately, providing everything from insurance to payroll loans to crypto trading. You don’t have to agree with the entire product line. We know what Buffett thinks about crypto. However, the company has become a financial-services juggernaut in a region that has historically been underbanked.
Image source: Getty Images.
Nu is rolling right now. Revenue rose a currency-adjusted 53% in its latest quarter. A 27% increase in accounts over the past year is great. An 18% jump in average revenue per active customer is even better.
A lot of fintech companies growing at this heady pace would be smaller or dealing with losses, but Nu has been profitable for five consecutive quarters. Margins are widening, even as Nu digs deeper into new territories and related product lines. This is a good top-line story, but the bottom line is taking the wheel now. Analysts see revenue growth decelerating to 35% this year, but they’re also targeting a 67% surge in earnings per share.
Berkshire Hathaway bought into Nu ahead of its IPO in 2021. It’s still holding. Investors can still buy into Nu with the stock still in the single digits despite more than doubling last year. A $300 investment could buy a handful of shares of something Nu.
2. Lennar
The real estate market was a tricky place to be in 2023, unless you happen to be a homebuilder. High mortgage rates kept homeowners in their homes, locked into low-rate loans. The supply of secondhand homes resulted in shifting demand to new construction that Lennar and its fellow developers offer.
Lennar closed out fiscal 2023 in fine fashion. Revenue and earnings moved higher in the fiscal fourth quarter, fueled by a 32% surge in new orders. It expects deliveries to increase by 10% in the new fiscal year. Lower rates later this year may open up the floodgates for pre-owned properties, but it should also drive overall selling prices higher.
Lennar is reasonably priced at less than 11 times trailing earnings. It just boosted its dividend earlier this month, along with expanding its share buyback efforts. This is a cyclical industry, but this should be another good year for Lennar, with its presence in strong real estate territories.
Rick Munarriz has positions in Nu. The Motley Fool has positions in and recommends Berkshire Hathaway and Lennar. The Motley Fool recommends Nu. The Motley Fool has a disclosure policy.
