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September is a month of fresh starts, and it’s the perfect time to get serious about your investments and find great stocks to add to your portfolio. Warren Buffett‘s equity positions are always a great place to find inspiration, and some of them look poised to soar right now. Nu Holdings (NYSE: NU) and American Express (NYSE: AXP) are two incredible stocks to load up on this month.

1. Nu Holdings: Unstoppable

Nu Holdings is a young fintech company that’s only been public since late 2021. Since then, it’s posted consistent high growth while improving profitability in fundamental ways. It has significant long-term opportunities and is harnessing them with a well-laid-out strategy.

It’s based in Brazil and operates under the banner of NuBank in its three markets of Brazil, Mexico, and Colombia. The company already has a substantial presence in Brazil, where it has 49% of the population as members, a number that continues to increase. It’s growing even faster in its other markets. Those are still small though, giving it tremendous room for growth, not to mention other Latin American countries that could be on its radar in the future.

Revenue increased 60% year over year in the second quarter, with growth across its products and markets.

Nu Holdings covers a broad spectrum of products and services, which it provides for low fees. It’s completely online and is actually the largest digital bank in the world. This allows it to charge low fees, since it’s asset light, freeing up resources to offer a better customer experience.

Nu’s strategy is to recruit members for one service and cross-sell and upsell more products and services. As it scales, its costs rise little as it serves more members and provides them with more services, thus boosting profitability. Average revenue per active user (ARPAC) increased from $7.8 to $9.3 in the second quarter, also substantially higher than $8.6 in the 2023 first quarter, while the cost to serve remained constant at $0.80. It’s also posted two consecutive quarters of increasing net income.

Nu isn’t your typical Buffett stock because it hasn’t been profitable consistently and trades for a premium valuation — 8 times trailing-12-month earnings. But it is a bank, and Buffett loves bank stocks because they’re flush with cash and have a place in a strong economy. Clearly, he sees the benefits of owning Nu despite its growth-stock and tech-stock status — features he doesn’t usually embrace.

Nu’s banking segment has been an integral part of total company performance. Deposits increased 23% year over year in the second quarter, and net interest margin widened by 8.6 percentage points to 18.6%, with cost of funding stable at 80%.

Nu has been a super stock that should skyrocket over time.

2. American Express: Another record quarter

American Express’ quarterly reports sound like a broken record, as the company continues to break records every quarter. Revenue increased 12% over last year in the second quarter to a record $15 billion, while earnings per share (EPS) also increased 12% to a record $2.89. That was inclusive of a reserve build of $327 million and total provisions for credit losses of $1.1 billion.

Cardmember spending increased 8% to a record $426.6 billion. Travel and entertainment are still making a pandemic recovery and fueled total growth with a 14% year-over-year increase, while younger customers continue to be the fastest-growing age cohort, accounting for 60% of new signups and spending 21% more than last year.

Management reaffirmed its full-year forecast of about 16% revenue growth and $11.20 in EPS, while providing a long-term outlook of double-digit percentage annual revenue growth and EPS growth.

American Express is a classic Buffett stock, with robust cash generation and a model that feeds its own growth — cardmember fees increased 21% over last year in the second quarter and go straight to the bottom line. It’s a closed-loop payments processing network in which it funds all of its own loans rather than through partnerships with banks. That means it has the features of a bank that Buffett loves, while being entirely online and benefiting from the asset-light model, and at the same time having the features of a high-profit credit card network.

American Express stock trades at the cheap valuation of 16 times trailing-12-month earnings, making this a bargain stock with years of growth opportunities ahead.

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American Express is an advertising partner of The Ascent, a Motley Fool company. Jennifer Saibil has positions in American Express. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.

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