Back in April, President Trump dropped his tariffs bombshell in the White House Rose Garden, sending both my Stocks and Shares ISA and Self-Invested Personal Pension (SIPP) into a tailspin.
However, as he presented his chart of numbers to the world, I remember hearing Warren Buffett’s immortal words inside my head: “Be fearful when others are greedy, and greedy when others are fearful.”
Fair to say, Trump spread fear throughout the market, with many high-quality shares plunging 25% or more in the days following the speech. So I put Warren’s words into action and bought some stocks that I thought looked ridiculously oversold — chiefly Nvidia, Shopify, and BlackRock World Mining Trust.
Zoom ahead seven months, and these stocks have increased by 93%, 90%, and 67%, respectively. And I’ve recently been taking some profit from these positions for various reasons, including a really high valuation in the case of Shopify.
This has enabled me to add approximately £3,000 to a UK stock inside my ISA and SIPP.
Wise
The share in question is Wise (LSE:WISE). The fintech firm moves money across borders far cheaper, faster, and more transparently than banks, making it an attractive proposition for both consumers and businesses.
There are numerous reasons why I’m bullish here. The first is that the stock has fallen 20% since September, so I’ve decided to take advantage of the dip.
Now at 916p (14 November), the valuation looks attractive. Based on forecasts for FY26, the shares are trading at 25 times forward earnings. That’s really not expensive for a high-quality growth company chasing a massive global market opportunity.
Speaking of which, Wise’s cross-border volume was up 24% to £84.9bn in the six months to 30 September. However, that’s a drop in the ocean compared to the £32trn annual market opportunity for cross-border payments.
While Wise has captured around 5% of the global market for personal international payments, it’s just 1% for small and medium-sized business. For large enterprises, it’s a minuscule percentage, but customer adoption is growing, with Upwork and MBSB Bank among the latest firms to join its platform.
Another reason I’ve decided to invest more money is because Wise will list its shares in the US next year. This should boost interest in both the stock and its business across the pond, where it has recently been launching ad campaigns for its products.
Disruptive model
We’re well on our way to handle trillions, not just billions, and become ‘the’ global network for the world’s money.
CEO Kristo Käärmann
Finally, Wise has a disruptive business model. As it has scaled, it has lowered its average cross-border take-rate, from 0.67% in FY24 to 0.52% today.
In other words, the company is sharing the benefits of economies of scale with its customers. This should attract more users while cementing its competitive position over time.
However, disruptive stocks like this come with higher risks. Wise is investing aggressively to grow market share, but it’s not alone. Strong competition from PayPal, Revolut, Remitly, and other fintechs is worth bearing in mind.
Nevertheless, if Wise were to capture even 10%-15% of the market opportunity ahead, it will be a significantly larger business. The company’s market cap today is just £9.4bn.
Investors might want to take a closer look while this stock’s hovering around £9.
