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StoneCo – Not a Marijuana Stock (STNE)

Posted on January 7, 2021

Today’s underlying is an ecommerce outfit based in the Cayman Islands, banking home of the independently wealthy, both criminal and hard-working.

They call themselves StoneCo (NASDAQ:STNE), and they claim to facilitate financial transactions for small business in Brazil.

Of all things…

Fundamentally speaking, StoneCo has some dastardly numbers:

  • P/E is 414.63,
  • P/B is 8.17, and
  • There is no dividend on offer.

Granted, she’s an online business – and that explains, at least in part, the inflated metrics – but with 6000 employees, we’re beyond start-up stage growth numbers.  So something’s amiss.

 

Maybe Investors Are Stoned?

A scan of the company’s press releases reveals little in the way of thrill-inducing buy signals.

Yes, Berkshire Hathaway owns a chunk of the company, and yes, that’s exciting.

But at some point, buying must needs exhaust itself.

And we believe that time is now – for now.

Have a look at the daily chart for the last year –

Many happy returns,

Matt McAbby

 

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