Fintech stocks still have a lot of potential to deliver solid gains for investors. These companies are pioneering how we transact money and sometimes challenge the nature of money with the case of cryptocurrencies such as Bitcoin (BTC-USD). In either case, we will see a continued disruption in how we use and think about money, with fintech stocks leading the way forward.
To take advantage of these fundamental shifts in the monetary system, I’ve researched three fintech stocks that offer investors the right tradeoff between risk and reward. Most of these names aren’t talked about often in the financial media, which means they could be hidden opportunities waiting to be discovered.
So here are the best fintech stocks that investors should consider adding to their portfolios in December.
MercadoLibre (MELI)
Known as Latin America’s e-commerce and fintech champion, MercadoLibre (NASDAQ:MELI) is one of those fintech stocks that investors should watch. This company recently reported strong growth in its payments platform, Mercado Pago, and also operates in various countries in Latin America, including Brazil and Argentina.
I feel that now is a good time for investors to open a position in MELI stock. The company reported a 40% year-on-year increase in net revenue, reaching $3.76 billion as part of its Q3 2023 earnings report. income from operations more than doubled for the fourth successive quarter, totaling $685 million.
As a company that operates in Latin America, it may also offer strategic value for investors in the United States, especially considering that most portfolios lack exposure to international and developing markets like what MELI stock offers.
To top things off, Wall Street also agrees that MELI has strong potential. The consensus among analysts is that its share will be a “Strong Buy” over the next twelve months. There’s also an implied upside of around 5% from its current price levels.
Fiserv (FISV)
Fiserv (NASDAQ:FISV) offers financial services technology solutions. It’s another company that has shown some strong company-specific momentum factors.
For instance, FISV stock’s third-quarter results were mostly positive. It reported an 8% increase in GAAP revenue to $4.87 billion, with notable growth across its business segments. The company’s GAAP EPS also significantly increased, recording a 108% rise to $1.56 in the third quarter and a 32% increase to $3.54 for the first nine months of 2023.
The company also strengthened its guidance. It expects revenue growth to fall in the 11% range and EPS growth to be between 15% and 16%. These developments will undeniably make many analysts and investors happy.
Indeed, some indications indicate that FISV could be undervalued from its current price levels. It trades at just 4.25 times sales and 27.87 times earnings. Wall Street believes that its top and bottom lines will grow substantially, as its forward P/E ratio is just 15.58.
It then seems that FISV stock’s projected growth (from analysts as well as directly from management), has not yet been priced in. This then makes it one of those fintech stocks to buy.
Bank of America (BAC)
Bank of America (NYSE:BAC) is not your typical fintech stock, as it’s one of the most iconic traditional banks in the United States. However, the line between these traditional brands and fintech has been blurring for some time, with BAC being one of the leading “legacy” businesses in fintech that is making substantial progress.
Some of BAC stock’s initiatives in fintech include its CashPro platform. This platform came into the limelight this year after launching its B2C payments solution in Canada as part of its strategy to provide consistent digital solutions across its markets.
Another development this year was BAC stock’s launch of its fintech accelerator, which seeks to upskill entrepreneurs from underrepresented communities. BAC therefore has a keen interest in promoting fintech, which may lead to a growth tailwind for investors.
Heading into next year, the company’s stock price has momentum on its side, as it’s currently up around 12% for the past month. We could see its share continue to climb higher on the growth angles of fintech, as well as the projected drop in interest rates next year. This then makes BAC one of those fintech stocks to buy.
On the date of publication, Matthew Farley did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed are those of the writer, subject to the InvestorPlace.com Publishing Guidelines