Investor modeled after Warren Buffet has significantly increased holdings in two struggling companies for his stock collection

Investor, akin to Warren Buffett, recently bolstered his holdings with two underperforming stocks within his portfolio.

In the dynamic world of footwear and financial technology, two companies - PayPal and Crocs - have been making headlines recently.

Crocs, known for its iconic plastic sandals that can be styled with pins and different branding, is expanding its reach in new markets. The brand is making a splash in China, a region with over a billion people, where it is being introduced with great anticipation. However, the company has faced challenges in North America, with a 6.5% decrease in revenue last quarter, and the HeyDude brand, a recent acquisition, seeing a decline in sales, leading to a write-off on the balance sheet.

On the other hand, PayPal, a mainstay in the financial technology space, is on a growth trajectory. Last quarter, the company reported a 2% year-over-year increase in users, reaching a record 438 million. PayPal's brand portfolio, which includes Venmo, the namesake PayPal service, and merchant payment processor Braintree, has been a key driver of this growth.

Braintree, which has seen aggressive growth in recent years, recently exited unprofitable deals, leading to a dip in payment volume growth. However, this quarter, payment volume for Braintree began to grow again. Venmo, PayPal's personal finance app, has also been a standout performer, with monthly debit card accounts growing 40% year over year. Venmo's revenue is also growing, with a 20% increase last quarter.

PayPal's new CEO, Alex Chriss, is implementing a retrenching strategy to simplify the company's operations. This strategy, along with a reduction in shares outstanding, is expected to boost earnings per share (EPS), a key driver of stock price gains over the long term.

Meanwhile, Crocs' stock has seen a 50% drawdown due to a bad acquisition and slowing growth in North America. However, the company's international sales are doing well, with a 18% increase in revenue last quarter.

Investors are taking notice of both companies. Punch Card Management, an institution known for making select few investments, recently added Crocs and PayPal stocks to its portfolio. Renaissance Technologies, another notable investor, has also added these stocks to its portfolio.

Both PayPal and Crocs have reduced their shares outstanding by around 20% in the last five years, indicating a focus on shareholder value. Additionally, both companies have forward price-to-earnings ratios (P/E) well below the market average, suggesting undervalued stocks.

As these two companies navigate their respective challenges and opportunities, they continue to captivate the attention of investors and consumers alike.