Don’t expect Warren Buffett to predict what stocks are out there Berkshire Hathaways portfolio will be the biggest winners in 2025. He’ll be the first to tell you he doesn’t know how any particular stock will perform over the next 12 months.
Buffett is right, of course. None of us can be confident about any stock’s near-term performance. However, at the start of the new year it’s fun to step out on a limb and make some predictions. So, with full disclosure that my picks are based more on intuition than anything else, here are the three Buffett stocks I expect to be the biggest winners in 2025.
Nu Holding (NYSE: NO) It would have been one of Buffett’s best-performing stocks of 2024 if the year ended in late October. Shares of the Latin American digital bank rose as much as 88% at one point over the past year. However, Buffett’s sale of nearly 20% of Berkshire’s stake in Noe spooked investors and sparked a major pullback.
However, I think Noh’s prospects in the new year look bright. The stock is valued more attractively after the recent sell-off, with shares trading at just 17.5 times forward earnings. this Multiple futures profits This is particularly compelling given Nu’s growth opportunities.
Nu’s revenue rose 53% year over year in the third quarter of 2024. The company’s number of active customers jumped 24% year over year. Meanwhile, costs of servicing active customers continued to trend downward.
Most of Nu’s success to date has been achieved in her native Brazil. More than half of Brazilian adults use the Nu financial platform. But Nu CEO David Velez said on a third-quarter earnings call that Mexico “could be another Brazil” for the company. No is gaining momentum in Colombia as well.
Ally Finance‘s (NYSE: Ally) Comments at an industry conference in September pretty much destroyed any chance of its stock being one of Buffett’s big winners for 2024. The financial services company is a major player in the auto financing market. Ally’s CFO, Ross Hutchinson, revealed at the Barclays Global Financial Services Conference on September 10, 2024, that credit conditions in its automotive retail business were deteriorating more quickly than expected.
CEO Michael Rhodes acknowledged on Ally’s third-quarter earnings call in October that the company faces “some earnings challenges over the next few quarters.” Part of the problem is that the US Federal Reserve’s interest rate cuts cause floating rate assets and near-term hedges to repricing. However, these interest rate cuts should act as a tailwind for Ally in the medium term. Investors looking ahead to 2025 should be aware of this.
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2025-01-02 10:48:00
