The last time I covered Wise (LSE:WISE) shares, on 18 October, I said that I was going to leave the FinTech stock on my watchlist, instead of buying it. In hindsight, that was the right move. Over the next month, the Wise share price fell nearly 20%.

Recently however, the shares have shown signs of a recovery, rebounding from a low of 700p on 24 November to 870p on Tuesday (they’ve since pulled back below 750p). So, what’s driving this share price rebound? And is it time for me to buy the stock for my portfolio?

Why Wise’s share price has popped

The main reason the share price has jumped this week is that the market was impressed with the company’s H1 FY22 results, which were posted on Tuesday.

Overall, the results were pretty good. For the half-year ended 30 September, revenue was up 33% to £256.3m while adjusted EBITDA was up 20% to £60.6m. The market liked the fact that gross margin came in at 67.8% versus 62% a year earlier, while free cash flow was up 39% at £59m.

What investors really liked, however, was the full-year guidance. Here, Wise said: “Based on our progress and current outlook for volumes and price drops, we now expect annual revenue growth for FY22 to be mid-to-high 20s on a percentage basis.”

Previously, the group had said that it was expecting revenue growth in the low-to-mid 20s percentage range for the year. So, this guidance increase was a nice surprise for investors.

Should I buy Wise shares now?

As for whether I should buy any of the shares for my portfolio, I’m still not convinced the stock offers an attractive risk/reward proposition, even after the recent share price weakness.

My main concern here is the valuation. At present, City analysts expect Wise to generate earnings of 6.16p per share for the financial year ending 31 March 2022. This means that at the current share price of 746p, the forward-looking price-to-earnings (P/E) ratio is about 121. I think that’s quite expensive relative to the expected revenue growth here. It’s worth noting that analysts at Reuters point out that of its listed peers, only Adyen and Square trade at higher price-to-EBITDA multiples using next year’s EBITDA forecast.

I’ll point out that I’m not against paying a high valuation for a stock if its growth is phenomenal and the company has a competitive advantage. Earlier this week, I actually bought some shares in US FinTech company Upstart for my portfolio, which has a P/E ratio of around 110. However, in the last quarter, its year-on-year revenue growth was 250%, which means it’s growing at a much faster rate than Wise. And I think Upstart’s business model (it provides an artificial intelligence platform for banks to help them lend more efficiently) is harder to replicate than Wise’s business model. So, I can justify the high valuation for the stock. 

In Wise’s case, however, I can’t justify paying a P/E ratio of 120+ for the shares. So, once again, I’m going to leave Wise on my watchlist for now.

All things considered, I think there are better growth stocks to buy right now.

The post The Wise share price is rebounding. Time to buy? appeared first on The Twelfth Magpie.

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• Below £8, this high-growth UK fintech stock looks like a bargain to me
• After crashing 13.7% today, is Wise now a stock market bargain at 805p?

Edward Sheldon owns shares of Upstart Holdings, Inc. The Motley Fool UK has recommended Square and Upstart Holdings, Inc. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.

Wise (LSE:WISE) shares hit the London Stock Exchange almost two weeks ago with a direct listing. The Wise share price hit a high of 1,030p on the second day of trading but has declined to 950p since. That’s still a decent increase on the opening price of 890p. Indeed if I consider market capitalisation, Wise has grown from £9.8bn on the day it started trading to £13.2bn today. 

The Wise listing has been successful, and early investors have done well. But I would like to know how the Wise share price might perform in the future. Perhaps today’s financial update might shed some light on the question.

An update from fintech firm Wise

Wise released a trading statement today. It covered the first quarter of the 2022 fiscal year. I believe the results will be good for the Wise share price, at least in the short term. Revenue came in at £123.5m for the quarter. That is 5.6% higher than the last quarter of 2021 and 43.1% higher than the first quarter of 2021. Cross-border transaction volumes have also increased, as have personal and business customers by 3% and 9%, respectively, quarter over quarter. Wise launched in India in the first quarter of the fiscal year 2022. All customers benefitted from 38% of transactions occurring instantly, the same as the last quarter of the prior fiscal year.

Wise defines the take rate as revenues divided by cross-border transaction volume, and it fell from 0.81% to 0.75% year over year. Wise gets its revenues from fees on transactions. Part of the decline can be explained by higher-priced transactions falling back to long-term average levels. But also, Wise was founded on the principle of improving transparency and reducing costs for international money transfers. Wise reduced pricing from 0.69% to 0.67% in the first quarter of the 2022 fiscal year in keeping with that mission.

The Wise share price is up 0.4% today. This does count as a positive reaction to the trading statement, although it is somewhat muted. That might be due to the general concerns around global economic growth at the moment. But, I would be getting worried about long-term revenue growth rates, especially considering the rich pricing of Wise shares.

The Wise share price

In my last article on Wise, I found that the company grew its annual revenues by 39% from 2020 to 2021. Although this was lower than the 2019 to 2020 revenue growth of 70%, it’s still brisk considering the company is a decade old. But, if I assume the 5.6% quarter on quarter revenue growth holds for the rest of the year, forecasted revenues for Wise will be £537m in the 2022 fiscal year. That would be a 27.6% growth in annual revenues, which is lower than the previous two years.

Wise has about 1.39bn shares outstanding. Assuming that count, Wise will have 30.3p in revenue per share for 2022. Assuming a net income margin of 6% (the average of the last three financial years), I can forecast earnings per share to be 2.33p for 2022. That means Wise shares are trading at 25 times revenues and 409 times earnings. That’s pricy for a company with slowing revenue growth. Revenue growth could pick up with the Indian expansion. However, I still want to watch the Wise share price to see how this plays out. I think it could go either way, and for now, I am not a buyer.

The post What’s next for the Wise share price? appeared first on The Twelfth Magpie.

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• Below £8, this high-growth UK fintech stock looks like a bargain to me
• After crashing 13.7% today, is Wise now a stock market bargain at 805p?

James J. McCombie has no position in any of the shares mentioned. The Motley Fool UK has no position in any of the shares mentioned. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.

Here, I’m going to highlight two UK FinTech stocks I’d buy today. I think these are a great way to capitalise on the related boom.

My top UK FinTech stock

One of my top stock picks is Alpha FX (LSE: AFX). It’s an under-the-radar British company offering foreign exchange (FX) hedging services that help businesses reduce currency risks. It also offers a payment processing network for large-scale international payments that enables businesses to send large sums of money globally more efficiently. Its customers include ASOS, Holland & Barrett, and Halfords.

Alpha FX is growing at a phenomenal rate. Between 2017 and 2020, revenue grew from £13.5m to £46.2m. Meanwhile yesterday, the FinTech company said revenues for the first half of 2021 increased a whopping 89% to £34m. As a result of this strong performance, the group expects to exceed its current expectations for the year (which it upgraded in late May). 

The strong growth isn’t the only thing I like about Alpha FX. I also like the fact it’s a very profitable company. Over the last three years, return on capital employed – a key measure of profitability – has averaged 19.5%, which is excellent. Additionally, I like the fact the company is led by founder Morgan Tillbrook. 

There are risks to consider here, of course. One is that the need to transact FX is closely linked to global trading activity. If economic conditions deteriorate, Alpha could be impacted. Another is the valuation. The company currently trades on a forward-looking P/E ratio of about 37, which is quite high. If growth slows, the stock could take a hit.

Overall however, I think this UK FinTech stock has a lot of appeal.

Data is the new oil

Another sector-related stock I’m bullish on is Experian (LSE: EXPN). It’s a leading provider of credit data and data analytics. Its solutions help businesses make faster, smarter lending decisions.

Experian appears to have considerable momentum right now. In May, the company said it was off to a “strong start” in FY2022 and that it was confident it would have another successful year.

Meanwhile today, Experian has posted revenue growth of 31% for the quarter ended 30 June. As a result of this performance, the company has upgraded its full-year guidance. It now expects to achieve total revenue growth for the year of 13-15% (including organic growth of 9-11%). Before today, analysts had been expecting revenue to climb 11% this year.

One risk here is the valuation. Experian currently trades at 35 times earnings, which doesn’t leave a huge margin of safety. If growth stalls, the shares could fall. Another risk to consider is industry disruption. In the US, the Biden administration wants to create a public credit reporting agency. If this goes ahead, it could hurt Experian’s revenues.

I’m comfortable with the risks however. I think this UK FinTech stock offers an attractive risk/reward proposition.

The post 2 UK FinTech stocks I’d buy today appeared first on The Twelfth Magpie.

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Edward Sheldon owns shares of ASOS, Alpha FX, and Experian. The Motley Fool UK has recommended ASOS, Alpha FX, and Experian. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.

So, what does Wise do? And should I be considering this newly minted public company for my portfolio?

Moving money worldwide

Wise (or TransferWise as it was formerly known) provides international money transfer solutions for individuals. Typically, when performing such transactions through a bank or foreign exchange dealers, there comes an enormous processing fee. But with Wise, transfers are not only on average seven times cheaper but also significantly faster. According to the company, 83% of all transactions are completed within 24 hours and 38% instantly.

As someone who often sends money abroad, that sounds quite impressive to me. So how does it work? Instead of transferring funds directly from one bank account to another, Wise uses a network of payment processors. These include Visa and Mastercard that process, authenticate, and approve transactions within seconds.

Given this new transfer structure is significantly more efficient than an archaic wire transfer, I’m not surprised to see the company’s platform attract more than 10 million users. This, in turn, has enabled Wise to generate £421m in revenue between March 2020 and 2021. And not only that, unlike many young fintech companies in the space, this one is actually profitable.

With an operating income of £44.9m, Wise works at a margin of around 11%. That’s certainly not fantastic. But it’s worth noting that it seems the majority of the firm’s expenses are fixed. Meaning as the number of users grow, margins should improve, pushing the share price even higher. At least, that’s what I would expect.

The Wise share price has its risks

As you may have already realised, a £13.5bn valuation for a company that just about makes £45m in underlying profits is quite a lofty figure. But that’s often the case with potentially high-flying tech stocks. It’s trying to revolutionise international transfers, after all.

However, there are some risks related to the way it operates. Specifically, its complete dependence on third-party companies to process transactions. Given that the firm will struggle to function without these other businesses, it doesn’t have much bargaining power to negotiate fees. Not to mention, should a relationship turn sour, it could cause significant disruption to its products and services. This, in turn, would likely push users towards a competitor. Needless to say, if Wise’s user numbers fall at this early stage, it would probably send its share price plummeting.

The bottom line

Overall, I’m not entirely convinced by the investment case, at least not yet. Wise has a monumental amount of competition in this space. What’s more, most of its rivals operate with similar technologies. To me, that indicates the barriers to entry aren’t that high, and that fee pricing power is near non-existent.

Its user base seems too small in my eyes to solidify its position within the fintech world. And so, for now, the company is staying on my watchlist until it can boost those numbers.

The post The Wise share price is on the rise. Should I buy now? appeared first on The Twelfth Magpie.

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Zaven Boyrazian owns shares of Mastercard. The Motley Fool UK owns shares of and has recommended Mastercard. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.

This has been a successful admission to the markets. And I can understand why: Wise is disrupting financial services, and unlike other tech stocks is not just bringing high revenue but also profits a decade after being founded. However, there are issues to address.

What is Wise?

Wise started in 2011 as TransferWise, offering low-cost international money transfers to everyday customers. Its goal was to make international money transfer cheaper, quicker, and more transparent than traditional banks. Wise is digitally native and does not offer cash services like, say, competitor Western Union, does.

The technology Wise uses to provide for international payments is fairly simple to understand schematically. Traditional banking would have someone routing money from their bank through a host of correspondent banks to an account on the other side of the world. Wise has built itself as a middleman between local payment services in multiple countries.

Source: Wise Prospectus

Wise moves money by taking a client’s currency into its own account here and moving currency from its account to the client’s over there, at an agreed exchange rate. Removing the intermediaries and manual checking of correspondent banking is how Wise keeps costs and time down.

I do think Wise has a good business model. Pandemic aside, the world is becoming more mobile. That speaks to an increased demand for moving money between countries. Digital money is becoming the norm, obviating the need for Wise to have high street shops. And people everywhere are moving online. That means shopping around for money services is easier, and so long as Wise can stick to its value proposition, it should continue to attract clients.

Wise share price

The typical early Wise user was a fairly affluent tech-savvy European. It has since expanded globally and moved onto business customers. If now offers more sophisticated banking services like international payments and multi-currency accounts. This has kept revenue growth high.

Table 1: Wise condensed income statement 2019–2021

Source: Wise Prospectus

Wise grew its revenues by 39% and doubled its profits over the 2021 fiscal year. Revenue growth is below the 70% seen in 2020 but operating and net profit margins are improving. But Wise shares are seemingly trading at 621 times earnings per share. That’s extremely high for a company with slowing revenue growth and established competitors.

Then there is the dual-class share structure, which gives the founders control but that kept Wise shares in the standard rather than premium, main market of the LSE. This locks Wise shares out of FTSE index inclusion and means losing long-term holders like index funds. However, a premium listing should be possible in five years, when the dual share class structure is due to expire.

I do like Wise shares, but I think its share price might be too rich for me at present. I will watch from the sidelines to see if anything changes.

The post Are shares in fintech firm Wise a buy? appeared first on The Twelfth Magpie.

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• Prediction: this UK growth stock will outperform Lloyds shares over the next 5 years
• Down 20% in a year, I’ve been loading up on this UK growth share!
• 2 excellent growth ideas for a Stocks and Shares ISA in June 2026
• Below £8, this high-growth UK fintech stock looks like a bargain to me
• After crashing 13.7% today, is Wise now a stock market bargain at 805p?

James J. McCombie has no position in any of the shares mentioned. The Motley Fool UK has no position in any of the shares mentioned. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.

I think we can conclude that last week’s market debut from money transfer firm Wise (LSE: WISE) was a success. Despite wider market concerns about Covid-19 and inflation, shares breached the 1,000p mark on Friday — that’s already 20% up on its opening price of 800p.

So, is this a fintech flash in the pan? I don’t think so. Here’s why.

1. It’s profitable

One thing I like about Wise is that it’s actually making profits. In fact, it’s been doing so for the last four years. Last year, pre-tax profits doubled to £41m.

As a potential investor, this is important to me. At a time when many tech-related stocks are pushing frothy valuations despite being a long way from making real money, Wise is bucking the trend. Contrast this with tech peer Deliveroo. The takeaway delivery firm is reluctant to even forecast when it expects to make a profit.

Wise’s already-profitable business model could also provide some protection if global markets come off the boil. I’m not so sure Deliveroo offers the same protection.

2. No cash raise

The direct listing of Wise shares is another attraction. The first tech stock to do so on the London Stock Exchange, this means it’s not looking for a fresh injection of cash from investors. Instead, it’s merely selling existing shares on the market. There was no need for investment banks to underwrite this (and charge high fees for doing so). 

This move makes Wise similar to the US listing of music streaming service Spotify in 2018. Although operating in very different sectors, it’s worth noting that the latter’s share price is up over 70% since then. 

The fact that Wise isn’t raising cash also reminds me of a quote from star UK fund manager Terry Smith: “Call us old-fashioned but when we’ve bought shares in a company, we like them to send us money after that, not the other way around. We think that’s how this relationship should work.”

3. Huge growth potential

Fintech is all the rage right now and it’s not hard to see why.  Investment in this space hit $44bn last year.

Sure, there are risks. One that immediately jumps out at me is the threat of cybercriminal attacks. Ongoing regulation could also prove a headwind.

Nevertheless, let’s not overlook the fact that this is a huge market and Wise has the potential to continue disrupting a part of the economy which has hitherto been dominated by big banks and the likes of Western Union. According to the company, its customers already send £5bn across borders every month. 

So, will I be buying?

Not yet. Wise shares could climb higher but I’d be inclined to build a stake slowly. As Dr Martens has shown, traders can be quick to sell after the initial hype dies down. No share price rises in a straight line, regardless of its growth potential.

The high number of companies coming to market right now also make me wary. This is nothing against Wise specifically, but it does imply that many founders now think they’ll get an optimum price for their shares. This could indicate markets are peaking. There’s something to be said for zigging when the majority are zagging.

Over the long term, Wise shares could prove a very wise investment. For now, I’ll watch from the sidelines.

The post 3 reasons I’m excited about Wise shares appeared first on The Twelfth Magpie.

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Paul Summers has no position in any of the shares mentioned. The Motley Fool UK owns shares of and has recommended Spotify Technology. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.

But is the SYME share price about to surge again? And should I be adding the fintech stock to my portfolio?

The volatile Supply@Me (SYME) share price

Supply@Me provides inventory monetisation services. Using its platform, product manufacturers can quickly raise cash by selling their inventory before finding a customer. How does this work?

It’s a somewhat complex process. But to put it simply, a company sells its inventory on the platform to the creditors of Supply@Me. This provides quick cash for the business to fund its operations, while the creditors use the inventory as collateral. Then, another company on the platform decides to buy this inventory for their own use at a later date. The money is then used to repay the creditors, and Supply@Me takes a small commission for facilitating its services.

Naturally, this can be risky. And is likely a contributor to SYME’s volatile share price. But something that didn’t help matters was the temporary trading suspension in January this year. Generally, suspensions are an indicator that something is seriously wrong. But in the case of Supply@Me, the reporting calendar was changed that led to a delay in the publication of results. Trading has since resumed.

The management team stated that the underlying business was not affected by this event. And looking at reported figures, I have to agree. The total number of customers throughout 2020 almost doubled from 85 to 165. Simultaneously, gross inventory originations increased by nearly 75% from £1.06bn to £1.84bn.

This ultimately led to revenues for the first six months of 2020 to surge from £11,000 a year before to around £368,000. Needless to say, those are some pretty impressive growth rates. And if they can be sustained, I believe the SYME share price could explode over the long term.

Some risks to consider

While the business appears to be doing well, the volatile share price indicates to me that there remains quite a high level of uncertainty. And rightfully so, in my opinion. Supply@Me’s platform can only scale if it can attract businesses to buy another’s inventory. Failing to do that, creditors would likely struggle to recoup their capital and are therefore less likely to purchase any further assets.

What’s more, the business is currently unprofitable and reported a loss of £2.1m in its half-year report. Admittedly £1.4m of this was from one-time charges related to its public listing. But the firm is still ultimately dependent on external financing to keep the lights on.

The bottom line

Supply@Me sounds like an exciting business. It has basically found a way to perform inventory financing but without a company taking on any debt. This, to me, sounds like it has potential, especially since the inventory financing market is estimated to be worth around £1.1trn.

But personally, I think it’s a bit too soon to invest. I’d rather wait and see how the business and SYME share price performs throughout 2021 before adding any shares to my portfolio.

The post Is the Supply@Me (SYME) share price about to explode? appeared first on The Twelfth Magpie.

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Zaven Boyrazian does not own shares in Supply@Me Capital. The Motley Fool UK has no position in any of the shares mentioned. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.

However, a rise in US bond yields has caused a large-scale tech stock sell-off. Rising yields are a key indicator of inflation, which erodes the future value of company earnings.

Though this may cause concern for investors, I’m taking advantage of cheaper share prices to top up on three US tech stocks I already hold.

#1. Palantir Technologies: data analytics

Palantir Technologies (NYSE: PLTR) specialises in data gathering and analytics. Its share price peaked at $39 in January 2021, up from $9 in October 2020.

The company offers three different data services, Gotham for governments, Foundry for corporate firms, and Apollo, which manages the two. Its Gotham government contracts provide a stable long-term income. In 2020 the company saw 47% revenue growth to $1.1bn, with 2021 forecasts expecting a similar figure.

However, the current price-to-book (P/B) ratio is around 28, signalling this stock could be overvalued. This is a risk for any investor buying now. For context US tech stock Microsoft trades on of P/B ratio of around 13. However, data collection is only going to accelerate in coming years, as the world increasingly shifts towards technological dependence. Therefore, I expect this stock to have a strong future and will buy more.

#2. NIO: Chinese electric travel

NIO (NYSE: NIO) is a Chinese electric car manufacturer. Its share price surged over 1,100% in 2020. Though the shares are down, this US-listed tech stock does boast some encouraging numbers. One example is the 113% year-on-year increase in production in 2020. It also has a much lower P/B ratio of 13.4, compared to industry leader Tesla’s 28.3. This indicates the current share price could be undervalued comparative to the industry giant.

However, if this US tech stock wants to become a front runner in the electric vehicle industry it will have to fend off some fierce competition, which is a risk that can’t be ignored. Ford has pledged $11bn for electric vehicle research from 2018-2022 and General Motors has set aside as even larger $27bn.

However, as a current investor I’m bullish about this US tech stock’s future growth. I’ll be buying more shares for my portfolio.

#3. Jumia Technologies: African e-commerce

Often referred to as “the Amazon of Africa”, Jumia Technologies (NYSE: JMIA) is a Nigerian e-commerce company. After its IPO in April 2019, this stock suffered some huge cash flow issues with operating losses exceeding revenues. However, throughout 2020 its share price exploded from just under $3, to peak at $65 per share in early February 2021.

With Africa’s lack of infrastructure, e-commerce has been largely overlooked as a viable business plan. Google owner Alphabet and Facebook are two US tech stocks that have announced plans to provide all of Sub-Saharan Africa with internet connections. If these projects are successful, I feel it would put Jumia in a great spot. Jumia’s conservative $4bn market cap also offers room for encouraging upside potential. I’m bullish about this US tech stock’s potential and, again, I’m going to add to my existing holding.

The post Why I’m buying these 3 US tech stocks today appeared first on The Twelfth Magpie.

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Dylan Hood owns shares in Jumia Technologies, Palantir Technologies, and NIO. Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool’s board of directors. Randi Zuckerberg, a former director of market development and spokeswoman for Facebook and sister to its CEO, Mark Zuckerberg, is a member of The Motley Fool's board of directors. The Motley Fool UK owns shares of and has recommended Alphabet (A shares), Facebook, and NIO Inc. The Motley Fool UK owns shares of Palantir Technologies Inc. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.

Of course, we’re all familiar with the disruption and ‘disintermediation’ (cutting out the middlemen) wrought by multi-billion-dollar giants, such as Amazon and Uber, but the fintech revolution has been rather more low-key. Fintech companies aren’t trying to pummel the whole financial industry into extinction but are intent on taking sizeable chunks of business from traditional incumbents.

Bloated with layers of intermediaries and widely distrusted since the 2008/9 crisis, the mainstream financial industry is under attack from fintech upstarts that are not burdened with legacy issues and systems and whose reputations are untarnished by the past.

Given Neil Woodford’s long-prevailing dislike of the big banks, it’s perhaps not surprising that he’s attracted by the relatively simple business models and exciting investment opportunities in the fintech sector.

Attractive income stream

Woodford is invested in some unquoted fintech companies, such as RateSetter, a peer-to-peer lending platform, and Seedrs, which opens up venture capitalism “to anyone with an internet connection”. However, he also has two holdings that are listed on the stock market — and very interesting they are too.

P2P Global Investments (LSE: P2P) is a FTSE 250 firm with a market cap of around £700m. Woodford’s team describes the business as follows: “This is a company that invests in a range of online peer-to-peer lending platforms and loans. It uses a proprietary technology system to seek out the highest quality loans available on these platforms. To manage risk, it targets a diversified portfolio of loans to both consumers and businesses across multiple geographies. It can also often invest in the platform providers directly. This leaves it well placed to deliver a stable and attractive income stream to its shareholders.”

Woodford first bought shares in the company at 1,000p in January 2015 but you can pick them up today for 840p. At this price, if analyst dividend forecasts can be believed, the yield for 2017 will be a whopping 11%.

Another to consider

VPC Specialty Lending Investments (LSE: VSL) is in the FTSE SmallCap index but is a decent-sized company with a market cap of around £290m. Its business is similar to P2P’s and like the FTSE 250 firm, considerable quantities of cash flow into shareholders’ pockets.

Analyst dividend forecasts for the current year give another tremendous yield — 9.4% at a current price of 77p. Woodford paid 100p when he bought in the company’s IPO in March 2015.

On the face of it, P2P and VPC look interesting prospects to consider, particularly for investors seeking a high income. But I’d want to understand the sector and these businesses in a little more depth before committing any cash even with Woodford being evidently keen.

If you don’t fancy pureplay fintech, Woodford is also a big fan of companies that combine traditional and fintech approaches. Two of his holdings of this nature that could be worth checking out are sub-prime lender Provident Financial and hybrid property agent Purplebricks.

The post Which fintech stocks does Neil Woodford own? appeared first on The Twelfth Magpie.

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G A Chester has no position in any shares mentioned. The Motley Fool UK owns shares of and has recommended Amazon. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.