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- Berkshire Hathaway's best-performing stock this year is likely Nubank-owner Nu Holdings, up 93%.
- Warren Buffett's company invested in the Brazilian fintech before and during its IPO in 2021.
- Apple stock is up this year, but other key Berkshire bets like Coca-Cola and Kraft Heinz are down.
Warren Buffett's Berkshire Hathaway has notched a 93% gain on Nu Holdings since the start of January, likely making the Nubank owner the best performer in Berkshire's stock portfolio this year.
The famed investor's company has also scored big gains on other positions in 2023, including Amazon (+57%) and Apple (+39%), its number-one holding. However, some of its landmark bets are solidly in the red for this year, including Coca-Cola (-14%), Bank of America (-17%), and Kraft Heinz (-18%).
Buffett's conglomerate originally plowed $500 million into Nubank in June 2021, then piled another $250 million or so into the crypto-friendly Brazilian bank when it went public in December 2021. Berkshire owned around 107 million shares of the digital lender at the end of June this year, giving it about a 2% stake worth $845 million at the time. The position is worth $840 million today, assuming Berkshire hasn't bought or sold any shares since the second quarter's close.
Nubank shares have slid 13% from their IPO price fo $9 to trade at $7.84 as of Wednesday's close. However, the bank has made significant gains on the operational front. In the year to June, it grew its customer count by 28% to 84 million, and its revenue by 61% to about $1.9 billion. It also swung from a $30 million net loss to a $225 million net profit over the same period.
Berkshire's Nubank wager has raised eyebrows, as the lender allows crypto trading on its platform and even launched its own native token earlier this year, when Buffett and right-hand man Charlie Munger have slammed bitcoin and other digital coins as worthless and a tool for criminals.
Given the Nubank stake is tiny in the context of Berkshire's roughly $350 billion stock portfolio, it was likely one of Buffett's two investment managers, Todd Combs and Ted Weschler, who placed the wager.
It's notable that Sequoia Capital provided seed funding to Nubank in 2013, the storied Silicon Valley venture capital firm owns close to 13% of the company across its various funds, and Nubank CEO and cofounder, David Vélez, is a former Sequoia partner.
Munger has hailed Sequoia as perhaps the "most remarkable investment firm in America" with "the best investment record of anybody." Nubank's close ties to Sequoia may have been a factor in Berkshire's purchase of its stock.