4. MercadoLibre Inc. (NASDAQ:MELI)
Share Price as of August 30: $2,015.79
Number of Hedge Fund Holders: 84
MercadoLibre Inc. (NASDAQ:MELI) is a leading platform for buying, selling, and financial transactions, that operates online marketplaces. It provides a marketplace for sellers to offer products ranging from electronics and clothing to home goods and groceries. It also offers payment solutions, logistics services, and other tools to support both sellers and buyers.
84 hedge funds were long in this company as of June 30. Generation Investment Management has the largest stake in the company currently, with a value of $821,709,861.
In the second quarter of 2024, the company recorded a year-over-year growth surge of 48.55%. The revenue for Q2 was $5.07 billion, which surpassed analyst expectations by $389.51 million. The earnings per share were also high at $10.48, again beating street estimates by $2.14.
Commerce revenue made a 53.4% contribution to the total revenue. The company’s fintech services are also thriving, with monthly active users surpassing 50 million in Q2 2024, and a revenue increase of 27.5%. Remunerated accounts are gaining popularity, driving growth in assets under management. Consumer and merchant credit books are scaling profitably. It issued 1.6 million new credit cards.
MercadoLibre Inc.’s (NASDAQ:MELI) logistics network is driving e-commerce growth. It recently opened a fulfillment center in Texas to expand product offerings for Mexican consumers and complement its existing cross-border business from China, providing a great shipping service for its US-based assortment.
The logistics network is becoming more efficient. SLOW shipments allow the company to optimize processing time and shipping routes. MELI Delivery Day reduces last-mile costs by grouping deliveries at single addresses.
The company experienced a 50.08% surge in its share price in just 1 year. With such surges, companies often resort to stock splits. However, MercadoLibre Inc. (NASDAQ:MELI) has never split its stock. Despite this record, it can be anticipated that this time around the company might make a first-ever move in this direction, given its high share price.
Lakehouse Global Growth Fund stated the following regarding MercadoLibre, Inc. (NASDAQ:MELI) in its May 2024 investor letter:
“The Fund’s largest position, Buenos Aires based e-commerce leader MercadoLibre, Inc. (NASDAQ:MELI), reported a robust result that once again came in ahead of analyst expectations. Net revenue grew 30% year-on-year in U.S. dollar terms to US$4.0 billion while operating margins came in at 12.0%, providing a healthy balance of growth and profitability. Its marketplace business proved resilient, with strength in Brazil and Mexico more than enough to offset weakness in Argentina, which contacted by roughly a third due to weak macroeconomic conditions exacerbated by the 50%-plus devaluation of the Argentine Peso in December 2023. Whilst the economic situation in Argentia remains severe, we are comfortable with the risk as not only has management proved very adept at handling the challenges to date, but post the devaluation, the risk is meaningfully reduced as Argentina now only contributes 13% of the company’s total operating income. Overall, gross merchandise value still grew at 20% year-on-year to $11.4 billion and we continue to see significant opportunities ahead given the relatively nascent penetration of e-commerce in the region.”
