Brett Huff, CFA, is Managing Director at Stephens Inc. Mr. Huff is a managing director leading the business services team. He joined Stephens Inc. in April 2005 as research associate covering title, insurance broker and financial services technology companies.
Prior to joining Stephens, he was an associate analyst at Southwest Securities focused on the specialty retail industry. He also previously worked at OpenAir, Inc., a private software company in Boston, which was subsequently purchased by NetSuite, Inc., where he held Director of Product Management and Director of Marketing positions.
Prior to that, he worked at Deloitte Consulting as a management consultant. Mr. Huff obtained his B.A. in social studies from Harvard University and received an MBA, focusing on finance and strategy, from the Kellogg School of Management at Northwestern University.
In this exclusive 4,406 word interview, Mr. Huff explains in detail how his financial technology company coverage universe has resulted in his amazing 30% annual return rate for his investors.
“Of these several themes across our coverage list, I think the two that are most interesting are the scale theme and the frictionless theme. We see the scale theme expressed, for example, by Fiserv looking to buy First Data and FIS looking to buy Worldpay.
These are two very large deals happening very near each other and back to back that have, in our view, really reignited the question about M&A scale.
And then, the second most interesting theme is around the frictionless consumer experience. So far, that’s been mostly expressed in the e-commerce payments use case. But we think it is also evolving into bank digital channel use cases, including internet banking.”
One specific stock that has exemplified Mr. Huff’s investment advice is Square (NYSE:SQ):
“Square certainly was high on our list when we last spoke, and the stock ultimately ended up performing very well. I think it’s one of the great stock stories of the last couple of years and played out more or less like we expected.
My thesis back when Square was beginning its journey as a stock was that I thought that the company, while a payments company to start out with, would ultimately be a bit of a platform company. So kind of an IT platform for small business, where Square would develop additional products beyond payments and kind of bolt them on and make it easy for small merchants to use.
And that’s what I think happened through a variety of new products, including some marketing products, some finance products, and some vertical-market-specific products for restaurants and retail.
…I think that is the interesting long-term growth story or one of the interesting long-term growth stories for Square. Although again, it’s largely built into its 12 times forward revenue multiple. So I still like that quality in Square but would wait for a little bit different price before it was more attractive.”
Get all the detail on this and many other fintech stocks in this 4,406 word interview, exclusively in the Wall Street Transcript.