Are you considering investing in FinTech companies? Make sure you take advantage of an action tracker

The emergence of financial technology (FinTech) companies has not gone unnoticed. Many new providers are entering the scene, with traditional FinTech companies being disrupted.

A good example is the rise of new payment providers that are beginning to eclipse traditional FinTech companies like PayPal. With more innovations happening in the space, there is also more potential for investments. With huge upsides and an addressable market, it’s a space worth exploring as an investor. In this article, we’ll take a look at the market and see why a stock tracker can help you make better FinTech investment decisions.

FinTech is about the markets it serves

When it comes to determining the value of FinTech companies, it is essential to understand their markets. For example, payment providers can offer a wide range of services to their customers. Since all businesses need transactions, their addressable market has enormous potential. We also observe that their EBIT margins are huge compared to traditional banks. It has to do with the use of technology that facilitates the conduct of transactions and KYC. Thanks to this combination, the margin is often close to the 50% range whereas traditional banks are often below 10%.

What does this mean for an investor?

The Total Addressable Market (TAM) components and the high EBIT margin prove that the market is of great interest to investors. With enormous growth potential, it is relevant to start investing in the FinTech field. You can achieve high alpha and grow your portfolio with these innovative companies. Adyen, Stripe and Mollie are good examples of top FinTech companies. These companies have a steep growth trajectory with new services launching every quarter.

What can a stock tracker offer you?

There are many potential options where a stock tracker can support your investments. For example, you can follow the stocks you are interested in to see what is happening in the market. This means you receive notifications about news, company information, and earnings reports released. This allows you to get a holistic view of the business, which helps you make a better investment decision.

An interesting example:

A good example of such an application is the This provider not only looks at traditional stocks, but also takes the crypto market into account. This allows you to have an overall view of your portfolio.

You can also create investment compartments. For example, you can split your watchlist with stocks you own, or you can create a split between growth stocks and dividend stocks. By creating these compartments, you can measure performance. In this context, it makes sense to create a separate compartment for FinTech stocks. This allows you to track the difference in performance between your FinTech and index funds. Ultimately, it’s about achieving an alpha. If that’s not possible, you should switch to other stocks (FinTech) to get there or focus on index funds.

Comments are closed.