Uncovering Institutional Buying In StoneCo Ltd. (NASDAQ: STNE)


Capital Research & Management Co. recently announced the acquisition of new stake in StoneCo Ltd. (NASDAQ:STNE). The institutional investor has increased its shareholding in the Technology company by 36.92% to 21.41 million shares with purchase of 5.77 million shares. This fresh investment now brings its stake to 11.92% valued currently at $829.92 million. In addition, T. Rowe Price International Ltd. raised its holdings by 0.92 million to 5.67 million shares. And Artisan Partners LP has lifted its position by 303.30% or 2.97 million shares – to 3.95 million shares.

With over 1.7 million StoneCo Ltd. (STNE) shares trading Thursday and a closing price of $47.03 on the day, the dollar volume was approximately $79.79 million. The shares have shown a positive weekly performance of 9.35% and its price on 07/30/20 gained nearly 0.28%. Currently, there are 277.37M common shares owned by the public and among those 152.39M shares have been available to trade.

An analysis of what Wall Street brokers have to say about the expected price targets for this stock gives us this picture: 15 analysts who have offered their price forecasts for STNE have a consensus price objective of $192.36. The analysts have set the share’s price value over the next 12 months at a high of $270.30 and a low of $116.49 should the stock experience a downside. Incidentally, analysts’ outlook for the StoneCo Ltd. stock is 2.40 for the next 12 months. The average price target is -29.99% below its last price level and a downside to the estimated low will see the stock gain 59.63% over that period. But an upside of 82.6% will see the stock hit the forecast high price target while mean target price for the stock is $183.58.

The top 3 mutual fund holders in StoneCo Ltd. are T Rowe Price New Horizons Fund, American Funds New World Fund, and American Funds EuroPacific Growth. T Rowe Price New Horizons Fund owns 17.42 million shares of the company’s stock, all valued at over $675.25 million. The company bought an additional 0.56 million shares recently to bring their total holdings to about 9.70% of the shares outstanding. American Funds New World Fund bought 0.5 million shares to see its total holdings expand to 9.09 million shares valued at over $352.23 million and representing 5.06% of the shares outstanding. American Funds EuroPacific Growth bought 0.55 million shares to bring its total holdings to over 7.61 million shares at a value of $295.07 million. American Funds EuroPacific Growth now owns shares totaling to 4.24% of the shares outstanding.

Shares of StoneCo Ltd. (NASDAQ: STNE) opened at $46.29, down -$0.61 from a prior closing price of $46.90. However, the script later closed the day at $47.03, up 0.28%. The company’s stock has a 5-day price change of 9.35% and 78.28% over the past three months. STNE shares are trading 17.90% year to date (YTD), with the 12-month market performance up to 34.33% higher. It has a 12-month low price of $17.72 and touched a high of $47.06 over the same period. Currently, 1.7 million shares have been traded, compared to an average intraday trading volume of 3.65 million shares. The stock is trading above its simple moving averages at the SMA20, SMA50, and SMA200, as the current price level is off by 13.24%, 25.18%, and 33.04% respectively.

Institutional ownership of StoneCo Ltd. (NASDAQ: STNE) shares accounts for 77.90% of the company’s 277.37M shares outstanding. Mutual fund holders own 28.26%, while other institutional holders and individual stakeholders account for 45.48% and — respectively.

It has a market capitalization of $13.15B. The stock’s trailing 12-month PE ratio is 88.07, while the earnings-per-share (ttm) stands at $0.53. The company has a PEG of 21.43 and a Quick Ratio of 1.70 with the debt-to-equity ratio at 1.01. Price movements for the stock have been influenced by the stock’s volatility, which stands at 4.57% over the week and 4.09% over the month.

Analysts forecast that StoneCo Ltd. (STNE) will achieve an EPS of $0.09 for the current quarter, $0.17 for the next quarter and $0.99 for 2021. The lowest estimate earnings-per-share for the quarter is $0.08 while analysts give the company a high EPS estimate of $0.13. Comparatively, EPS for the current quarter was $0.17 a year ago. Earnings per share for the fiscal year are expected to increase by 121.30%, and 70.72% over the next financial year.

If you are looking to buy this stock, then you may note that the average analyst recommendation by 15 brokerage firm advisors rate StoneCo Ltd. (STNE) as a “Moderate Buy” at a consensus score of 2.40. Specifically, 8 Wall Street analysts polled rate the stock as a buy, while 7 of the 15 advise that investors “hold,” and 0 rated it as a “Sell.”

Looking at the support for the STNE, a number of firms have released research notes about the stock. HSBC Securities stated their Hold rating for the stock in a research note on March 27, 2020, with the firm’s price target at. JP Morgan coverage for the StoneCo Ltd. (STNE) stock in a research note released on February 27, 2020 offered a Overweight rating with a price target of $48. Evercore ISI was of a view on November 14, 2019 that the stock is In-line, while Citigroup gave the stock Buy rating on October 30, 2019, issuing a price target of. UBS on their part issued Buy rating on October 18, 2019.


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