Here’s Why ClearBridge Investments Sold its MercadoLibre (MELI) Stake

ClearBridge Investments, an investment management firm, published its “International Growth ACWI ex-U.S. Strategy” first quarter 2022 investor letter – a copy of which can be downloaded here. During the first quarter, the ClearBridge International Growth EAFE Strategy underperformed its MSCI EAFE Index benchmark. The Strategy had losses across nine of the 10 sectors in which it was invested (out of 11 total), driven by the subsector and stock-specific allocations toward growth areas versus the benchmark. IT, health care, and industrials sectors were the primary detractors while the energy sector was the sole contributor. Try to spend some time taking a look at the fund’s top 5 holdings to be informed about their best picks for 2022.

In its Q1 2022 investor letter, ClearBridge Investments  International Growth EAFE Strategy mentioned MercadoLibre, Inc. (NASDAQ:MELI) and explained its insights for the company. Founded in 1999, MercadoLibre, Inc. (NASDAQ:MELI)  is a Buenos Aires, Argentina-based online marketplace company with a $53.4 billion market capitalization. MercadoLibre, Inc. (NASDAQ:MELI) delivered a -21.36% return since the beginning of the year, while its 12-month returns are down by -33.71%. The stock closed at $1,060.34 per share on April 14, 2022.

Here is what ClearBridge Investments  International Growth EAFE Strategy has to say about MercadoLibre, Inc. (NASDAQ:MELI) in its Q1 2022 investor letter:

“Most of our selling over the last several quarters has occurred among emerging growth companies, where we have reduced our exposure to under 5% to better manage risk. Latin America e-commerce platform MercadoLibre (NASDAQ:MELI) has also experienced an unwind of COVID-19-induced demand while high inflation and high interest rates in Brazil create new headwinds for consumer purchasing power, which will likely mean slower sales of high-ticket items on the company’s platform and led to the sale of the position.”

Our calculations show that MercadoLibre, Inc. (NASDAQ:MELI) fell short and didn’t make it on our list of the 30 Most Popular Stocks Among Hedge Funds. MercadoLibre, Inc. (NASDAQ:MELI) was in 74 hedge fund portfolios at the end of the fourth quarter of 2021, compared to 68 funds in the previous quarter. MercadoLibre, Inc. (NASDAQ:MELI) delivered a -6.25% return in the past 3 months.

In April 2022, we published an article that includes MercadoLibre, Inc. (NASDAQ:MELI) in another article. You can find other investor letters from hedge funds and prominent investors on our hedge fund investor letters 2022 Q1 page.

Disclosure: None. This article is originally published at Insider Monkey.