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($$$MR. MARKET$$$ is a proprietary investor and does not provide individual financial advice. The stocks mentioned on this forum do not represent individual buy or sell recommendations and should not be viewed as such. Individual investors should consider speaking with a professional investment adviser before making any investment decisions.)
Michael Timothy Pagliarulo, a.k.a. "Pags" (born March 15, 1960), is an American former professional baseball third baseman and later the hitting coach of the Miami Marlins. He played in Major League Baseball for the New York Yankees, San Diego Padres, Minnesota Twins, Baltimore Orioles, and Texas Rangers, and in Nippon Professional Baseball for the Seibu Lions.
Even though Pags was from Massachusetts, I didn’t know him but from what I understand even though he wasn’t a Hall of Fame baseball player, he’s a super nice guy.
Now, having said all that, there’s another PAGS out there. This PAGS is a Brazilian company that is tearing up the big leagues in South America!
Today I bought PagSeguro Digital Ltd (PAGS) at 32.19 I will sell it in 4 – 6 weeks at 37.34 Here’s why I like PAGS:
It always starts with the chart. While at first glance, this chart may not look spectacular, you have to discount the volatility by taking into account that this company is in Brazil. But given that, once the financials start to make themselves relevant, this company has become beloved.
In the last 5 months, this stock is up about 88%. Despite this climb, its PE trades at a relatively modest 45.
PagSeguro Digital Ltd. provides financial technology solutions and services for micro-merchants, and small and medium-sized businesses in Brazil and internationally. The company's products and services include PagSeguro Ecosystem, an end-to-end digital ecosystem that operates as a closed loop where its clients are able to address their primary day to day financial needs, including receiving and spending funds, and managing and growing their businesses; and Free PagSeguro digital account, which centralizes various cash-in options, functionalities, services, and cash-out options in a single ecosystem. It also offers online gaming and cross-border digital services. In addition, the company offers functionalities, and value-added services and features, such as purchase protection mechanisms, antifraud platform, account and business management tools, eWallet, and its (point of sale) POS app. Further, it is involved in processing of back-office solutions, including sales reconciliation, and gateway solutions and services, as well as the capture of credit cards with acquirers and sub acquirers. Additionally, the company engages in the in-person payment activities through POS devices; and issuance of prepaid cards to clients for spending or withdrawing account balances. It also operates an online platform that facilitates peer-to-peer lending. The company was founded in 2006 and is headquartered in São Paulo, Brazil.
If you can’t quite digest all of that, the simple explanation is that you take Brazil. I’m not talking about Bo Bo Brazil. I am talking about the country Brazil. Brazil has a population of over 200 million people, making it the 5th most populated country in the world. Now you give all of these people a product that they previously had not had much access to….we’re talking about cashless transactions (think Paypal, Venmo, etc) and also a point of sale device (think Apple Square) for small businesses which were traditionally cash only businesses that didn’t want to deal with big bank credit card fees. Voila…you have PAGS.
Brazil is a little bit behind the US in the transition from cash based society to credit card and digital payment acceptance. But, at the end of the day, people are people. You now see cashless businesses in the US. There is no reason to think that Brazil will be that far behind.
Only a third of Brazilians own a credit card which means there is a TREMENDOUS opportunity for growth within the existing (already mammoth) population. The point of sale devices only really caught on when wireless internet became more and more prevalent, accepted and finally expected! Ecommerce is growing at nearly a 20% annual clip but represents less than 5% of all sales transactions. Yes…room to go…for sure!
PAGS locked in the merchants who bought their devices. Once customers and stores began to share the bill payment app developed by PAGS, you started to build customer loyalty programs. The success of this rollout has been ridiculous, especially with the growth of 4G access to the Brazilian consumer. Smart phone transactions will follow the same path in Brazil as it has already done in the USA.
Wait til you see the financials. Let’s talk revenues:
2015 112 million
2016 228 million
2017 512 million
2018 682 million
Which leads to earnings:
2015 9 million
2016 35 million
2017 145 million
2018 235 million
Yup…that’s just cra cra. PagSeguro reported fourth-quarter and full-year results after market close on Feb. 21, 2019 with significant revenue and earnings upside surprises in addition to optimistic guidance for 2019. PagSeguro's revenue for the fourth quarter was $336.9 million (almost half of the 2018 annual total). We’re talking year over year growth of 50%. That’s nuts.
PAGS keeps coming up with ways to make its customers and vendors depend on its service. Now customers can just walk up with their phone and make a payment, like they do today at Starbucks. PagSeguro is very well positioned to outperform over the long run given the company's earnings growth which will fuel more innovation while keeping their existing customer base.
Here’s what the CEO, Ricardo Dutra, had to say:
“Our primary focus is the payment business, and we will keep investing to maintain our fast growth combined with profitability. We will now enter a new phase that we believe will be a landmark in PAGS' history.
Starting tonight, the Company will offer digital payments and banking services in a massive way through the app to any Brazilian consumer in an onboarding process that takes less than three minutes. We are now launching a national advertising campaign to promote these services under the brand PagBank.
PAGS already has a complete payments ecosystem, which is the core for digital accounts cash-in. We built our digital bank ecosystem with features such as wire transfers, P2P transfers, prepaid card, bill payments, mobile top up, among others, in order to become the clients' final money destination and to further increase our closed-loop transactions.
PAGS has already 4.4 million active merchant digital accounts in long-tail market. Although they are cash-in as merchants, they operate as a consumer when they cash out. With the launch of cash card and payroll portability, we are ready to fully serve Brazilian consumers built in the past to deploy our super app.
Considering the new initiatives already available for merchants and consumers, we estimate the revenue pool almost 14x times bigger than merchant acquiring services. Being the first mover, having a robust and low-cost ecosystem with 4.4 million active digital accounts, mobile-first, strong brand, focus on user experience, the best rated financial services app on Google and Apple stores and unreplicable online distribution through UOL, brings a natural advantage and leadership in the long-tail market.”
I will simply say “Obligado” as I take this trade to the pay window. I am HUGE!
$$$MR. MARKET$$$
Michael Timothy Pagliarulo, a.k.a. "Pags" (born March 15, 1960), is an American former professional baseball third baseman and later the hitting coach of the Miami Marlins. He played in Major League Baseball for the New York Yankees, San Diego Padres, Minnesota Twins, Baltimore Orioles, and Texas Rangers, and in Nippon Professional Baseball for the Seibu Lions.
Even though Pags was from Massachusetts, I didn’t know him but from what I understand even though he wasn’t a Hall of Fame baseball player, he’s a super nice guy.
Now, having said all that, there’s another PAGS out there. This PAGS is a Brazilian company that is tearing up the big leagues in South America!
Today I bought PagSeguro Digital Ltd (PAGS) at 32.19 I will sell it in 4 – 6 weeks at 37.34 Here’s why I like PAGS:
It always starts with the chart. While at first glance, this chart may not look spectacular, you have to discount the volatility by taking into account that this company is in Brazil. But given that, once the financials start to make themselves relevant, this company has become beloved.
In the last 5 months, this stock is up about 88%. Despite this climb, its PE trades at a relatively modest 45.
PagSeguro Digital Ltd. provides financial technology solutions and services for micro-merchants, and small and medium-sized businesses in Brazil and internationally. The company's products and services include PagSeguro Ecosystem, an end-to-end digital ecosystem that operates as a closed loop where its clients are able to address their primary day to day financial needs, including receiving and spending funds, and managing and growing their businesses; and Free PagSeguro digital account, which centralizes various cash-in options, functionalities, services, and cash-out options in a single ecosystem. It also offers online gaming and cross-border digital services. In addition, the company offers functionalities, and value-added services and features, such as purchase protection mechanisms, antifraud platform, account and business management tools, eWallet, and its (point of sale) POS app. Further, it is involved in processing of back-office solutions, including sales reconciliation, and gateway solutions and services, as well as the capture of credit cards with acquirers and sub acquirers. Additionally, the company engages in the in-person payment activities through POS devices; and issuance of prepaid cards to clients for spending or withdrawing account balances. It also operates an online platform that facilitates peer-to-peer lending. The company was founded in 2006 and is headquartered in São Paulo, Brazil.
If you can’t quite digest all of that, the simple explanation is that you take Brazil. I’m not talking about Bo Bo Brazil. I am talking about the country Brazil. Brazil has a population of over 200 million people, making it the 5th most populated country in the world. Now you give all of these people a product that they previously had not had much access to….we’re talking about cashless transactions (think Paypal, Venmo, etc) and also a point of sale device (think Apple Square) for small businesses which were traditionally cash only businesses that didn’t want to deal with big bank credit card fees. Voila…you have PAGS.
Brazil is a little bit behind the US in the transition from cash based society to credit card and digital payment acceptance. But, at the end of the day, people are people. You now see cashless businesses in the US. There is no reason to think that Brazil will be that far behind.
Only a third of Brazilians own a credit card which means there is a TREMENDOUS opportunity for growth within the existing (already mammoth) population. The point of sale devices only really caught on when wireless internet became more and more prevalent, accepted and finally expected! Ecommerce is growing at nearly a 20% annual clip but represents less than 5% of all sales transactions. Yes…room to go…for sure!
PAGS locked in the merchants who bought their devices. Once customers and stores began to share the bill payment app developed by PAGS, you started to build customer loyalty programs. The success of this rollout has been ridiculous, especially with the growth of 4G access to the Brazilian consumer. Smart phone transactions will follow the same path in Brazil as it has already done in the USA.
Wait til you see the financials. Let’s talk revenues:
2015 112 million
2016 228 million
2017 512 million
2018 682 million
Which leads to earnings:
2015 9 million
2016 35 million
2017 145 million
2018 235 million
Yup…that’s just cra cra. PagSeguro reported fourth-quarter and full-year results after market close on Feb. 21, 2019 with significant revenue and earnings upside surprises in addition to optimistic guidance for 2019. PagSeguro's revenue for the fourth quarter was $336.9 million (almost half of the 2018 annual total). We’re talking year over year growth of 50%. That’s nuts.
PAGS keeps coming up with ways to make its customers and vendors depend on its service. Now customers can just walk up with their phone and make a payment, like they do today at Starbucks. PagSeguro is very well positioned to outperform over the long run given the company's earnings growth which will fuel more innovation while keeping their existing customer base.
Here’s what the CEO, Ricardo Dutra, had to say:
“Our primary focus is the payment business, and we will keep investing to maintain our fast growth combined with profitability. We will now enter a new phase that we believe will be a landmark in PAGS' history.
Starting tonight, the Company will offer digital payments and banking services in a massive way through the app to any Brazilian consumer in an onboarding process that takes less than three minutes. We are now launching a national advertising campaign to promote these services under the brand PagBank.
PAGS already has a complete payments ecosystem, which is the core for digital accounts cash-in. We built our digital bank ecosystem with features such as wire transfers, P2P transfers, prepaid card, bill payments, mobile top up, among others, in order to become the clients' final money destination and to further increase our closed-loop transactions.
PAGS has already 4.4 million active merchant digital accounts in long-tail market. Although they are cash-in as merchants, they operate as a consumer when they cash out. With the launch of cash card and payroll portability, we are ready to fully serve Brazilian consumers built in the past to deploy our super app.
Considering the new initiatives already available for merchants and consumers, we estimate the revenue pool almost 14x times bigger than merchant acquiring services. Being the first mover, having a robust and low-cost ecosystem with 4.4 million active digital accounts, mobile-first, strong brand, focus on user experience, the best rated financial services app on Google and Apple stores and unreplicable online distribution through UOL, brings a natural advantage and leadership in the long-tail market.”
I will simply say “Obligado” as I take this trade to the pay window. I am HUGE!
$$$MR. MARKET$$$
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