2 Fintech stocks worth considering for your portfolio
Investors looking to add to their fintech holdings may want to take a look Nelnet (NNI 0.49%) and Upstart (OPST -19.71%). In this clip from “The Future of Fintech” on Motley Fool Live, recorded June 30thFool.com contributors Lou Whiteman and Matt Frankel discuss the money-grabbing businesses that have attracted attention.
Lou Whiteman: These are two top 15 places for me and I do not intend to leave any of them. I think very different companies when it comes to maturity, when it comes to risk-reward, so I do not necessarily want to call it a fair trade. Nelnet for people who do not know that they have a huge portfolio of state-subsidized student loans on book, which Jim Gillies likes to describe as a slowly melting iceberg of cash. There are billions of cash.
If we somehow see relief for student loans, these are the state-subsidized, so it is basically the government that writes Nelnet a check and they get the money faster, so it is not that risk even if there is a certain headline risk there. They also have a huge service portfolio where they charge fees from these other businesses.
It’s basically a capital allocation game because they have all this cash, and what they do with them from here is the question. If you have a child in private schools if you have paid money to FACTS Management or continue PowerSchool (PWSC 1.36%), I think or some of these products, many of these financial management projects for colleges as well. They have many such businesses. I really like that business. I am the owner of that business, but it is a completely different risk reward than Upstart. I personally hold them both, I would not trade one for the other, but I absolutely love both of these companies. Do You Own Nelnet?
Matt Frankel: I do not own Nelnet. I think it’s a safer game of the two.
White man: Surely.
Frankel: I would go so far as to say that. They are two different types of businesses.
White man: Yes. I stumbled upon that company when my daughter is now going to be second in high school, when I had not started paying big money to a company called FACTS Management when she went to kindergarten, and who the hell is this? They only have one printing company for money and then they discover what else was in the industry, so yes.
Lou Whiteman holds positions in Nelnet and Upstart Holdings, Inc. Matthew Frankel, CFP® has no position in any of the aforementioned shares. The Motley Fool holds positions in and recommends Nelnet and Upstart Holdings, Inc. The Motley Fool has a disclosure policy.
