The best Fintech shares to buy with $ 100

Fiery inflation and rising interest rates have caused the market to fall, and Wall Street is playing it safe by selling new and exciting shares in favor of the proven. But it can create opportunities for the bold and patient investor, and the space for financial technology, or fintech, is ripe for prospects.

You don’t even need a ton of money to get exposure to the long-term upside – you can buy shares of these three potential rising stars for less than $ 100.

1. Upstart Holdings

Upstart (OPST -3.78%) uses artificial intelligence to generate a credit score that potentially replaces Fair Isaacits FICO score and determines a borrower’s dignity. It uses that score to create personal loans and car loans and then refer those loans to one of the banks or credit unions in the referral network for a fee, which is how Upstart generates most of its revenue.

Based on Upstart’s stock price decline, some investors may be concerned that AI may fail in a recession as more borrowers have the potential to default on their loans. This is a valid concern, and investors should follow Upstart’s quarterly updates closely to see how their loans are performing.

However, several lenders partner with Upstart each quarter (that was a total of 57 per 1st quarter 2022), and 11 of these partners have dropped FICO scores from their borrowers. These rising numbers may signal that lenders have faith in Upstart’s technology.

The company has just under $ 1 billion in cash on the balance sheet, which should provide financial stability in a recession. It also means that the stock’s current market value of $ 2.1 billion is cheap – you get almost half of the company’s value in cash! The price-to-sales ratio (P / S) is only 2.3, which can be a bargain in retrospect.

At a price of about $ 25 per share, you will have $ 75 of the original $ 100 left.

2. Confirm inventories

The lending service known as Buy Now, Pay Later (BNPL) became mainstream in 2021, and Confirm (AFRM 4.95%) is one of the leaders in the BNPL industry. Shoppers can go through Affirm to shop online, and receive instant loan offers for everything they want to buy. Affirm uses AI to make lending decisions right at the point of sale.

Consumers benefit from Affirm because it does not charge late fees and often does not charge interest. Sellers benefit from this because these simple, flexible loans encourage buyers to follow up on purchases. Affirm makes money on any interest it charges users and the fees it collects from affiliate retailers.

Affirm has been laser-focused on expanding its ecosystem, bringing as many buyers and sellers to the platform as possible. Cooperation has been entered into with several retail forces, including Amazon, Shopify, Walmartand Goal. In the meantime, there are now 12.7 million active users shopping through Affirm. The company is also launching a debit card that can help it continue to increase its user base.

The company has loans on the balance sheet, which is probably the reason for the share’s dramatic fall, especially with a potential recession on the way. However, Affirm holds more than $ 3 billion in cash and the like, while just over 2% of loans are more than 30 days late. Investors should monitor quarterly results to ensure that losses do not accumulate.

Investors get about half of Affirm’s market value of $ 6 billion in cash, and the stock is traded at a P / S of just 4.6. Is Affirm a Guaranteed Success? Of course not, but the upside can be significant if things work out.

At a price of about $ 21 per share, you will have $ 54 left over from the original $ 100.

3. DLocal Limited

E-commerce has steadily grown into a massive but fragmented industry over the last two decades. The headache of foreign payments can deter buyers and sellers from using e-commerce outside the domestic markets. DLocal Limited‘s (DLO -4.45%) Application Programming Interface (API) allows salespeople to receive and send money and settle transactions in emerging markets.

DLocal specializes in emerging markets such as Africa, the Middle East, Latin America and Asia. It currently operates with more than 400 merchants and supports more than 700 local payment methods. The annual payment volume DLocal has processed grew from $ 1.3 billion in 2019 to $ 6.0 billion in 2021.

Wall Street may be concerned about potential competition from companies such as the Dutch payment giant Adyen. Nevertheless, DLocal’s management believes that the total payment volume in the markets it aims for may exceed $ 1 trillion by 2024, so there seems to be room for more winners.

DLocal has $ 410 million in cash and generated $ 87 million in net income over the past year, so the business is financially stable despite the share price falling more than 60% from its peak. Like most technology stocks, DLocal stocks have gained a hit in this market. You may not be able to call the share cheap at a P / S of 28, but the shares were at a P / S of 120 last autumn, so the valuation looks more reasonable today.

At a price of about $ 25 per share, you will have $ 29 left to buy a second share of any of these three shares if you wish.