The 3 Best Fintech Stocks to Buy for February 2023

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Fresh to write about the three most undervalued fintech stocks to buy for February 2023, I’ve been asked to come up with the top three fintech stocks to buy this month. Compared to my undervalued picks, the best fintech stocks are well-known. Although they are not necessarily mega-caps, they have products and services that most investors will recognize.

Unfortunately, now is a tough time to think about fintech investments. TechCrunch recently discussed how even well-funded fintech companies are laying off employees. For example, on January 31, PayPal (NASDAQ:PYPL), one of the largest fintech companies in the world, announced that it would cut 7% of employees, or about 2,000 workers.

With layoffs looming, perhaps the best fintech stocks are large-caps that are likely to weather the challenging macro environment much better than their smaller peers. You’ll find two of these below, plus a contrarian play. You’ll also likely notice that the best fintech stocks to buy now have an international bent.

EMFQ
Amplify Emerging Markets FinTech ETF
$22.04
MELI
MercadoLibre
$1,104.95
ADYEY
Adyen
$14.17

Amplify Emerging Markets FinTech ETF (EMFQ)

Source: shutterstock.com/ZinetroN

My first choice is the contrarian of the bunch. Not only do I go with an ETF with Amplify Emerging Markets FinTech ETF (NYSEARCA:EMFQ), this invests in companies operating in both emerging and frontier markets that source at least half of their own revenues from fintech.

Emerging markets are generally expected to outperform US stocks in 2023 and beyond. Actual, Morgan Stanley analysts expect emerging markets to surpass the next decade.

“Every decade there is a new leader in the market,” said Jitania Kandhari, deputy managing director of investments at Morgan Stanley Investment Management. “In the 2010s it was US stocks and mega-cap tech. Leaders in this decade can clearly be emerging markets and international stocks.”

Interestingly, my next choice, MercadoLibre (NASDAQ:MELI), is one of EMFQ’s top 10 holdings with a weight of 3%. However, the 10 holdings’ weights vary narrowly from 2.97% to 3.92%. That’s because it’s a modified equal-weight ETF that rebalances four times per year.

The weighted average market capitalization is $26.3 billion with a nice mix of large (25%), medium (35%), small (27%) and micro (13%) companies.