TIVP023: Nubank (NU): Banking on Latin America w/ Shawn O’Malley & Daniel Mahncke

In this episode of The Investor's Podcast, Shawn pitches Nubank, a fast-growing digital bank in Brazil, to Daniel. They discuss Nubank's disruptive business model, its impressive adoption rates, and its potential for growth in Latin America. Shawn highlights Nubank's cost advantages, customer-centric culture, and the leadership of its CEO, David Velez. Daniel raises concerns about the risks associated with investing in fast-growing financial companies, currency volatility, and the potential for increased competition. Shawn addresses these concerns by examining Nubank's lending practices, credit ratings, and corporate culture. They also discuss key metrics for evaluating digital banking businesses, such as return on equity, net interest margin, and loan loss provision ratio. Shawn presents his valuation of Nubank, considering the risks and potential rewards, and suggests a target buy range. Ultimately, they decide to add Nubank to their portfolio with a small position, acknowledging the potential for both significant upside and downside.