Fred Alger Management, an investment management company, released its “Alger Spectra Fund” fourth quarter 2024 investor letter. A copy of the investor letter can be downloaded here. U.S. equities showed positive performance in the fourth quarter, primarily fueled by a clear outcome in the U.S. presidential election. Against this backdrop, the fund’s Class A shares outperformed the Russell 3000 Growth Index in the quarter. In addition, please check the fund’s top five holdings to know its best picks in 2024.
In its fourth quarter 2024 investor letter, Alger Spectra Fund emphasized stocks such as MercadoLibre, Inc. (NASDAQ:MELI). MercadoLibre, Inc. (NASDAQ:MELI) is an online commerce platform that operates Mercado Libre Marketplace and Mercado Pago FinTech platforms. The one-month return MercadoLibre, Inc. (NASDAQ:MELI) was 13.58%, and its shares gained 13.99% of their value over the last 52 weeks. On February 5, 2024, MercadoLibre, Inc. (NASDAQ:MELI) stock closed at $1,975.19 per share, with a market capitalization of $100.137 billion.
Alger Spectra Fund stated the following regarding MercadoLibre, Inc. (NASDAQ:MELI) in its Q4 2024 investor letter:
“MercadoLibre, Inc. (NASDAQ:MELI) is Latin America’s leading e-commerce and fintech platform, holding dominant positions in Brazil, Mexico, and Argentina but it also operates in 17 other countries. Despite competition from global e-commerce players, the company has successfully maintained and expanded its market share. MercadoLibre has leveraged its strengths in customer data and distribution to drive rapid growth in its profitable advertising and fintech segments. In our view, the company’s success is largely driven by strong network effects in e-commerce and logistics, data and distribution advantages in fintech, and a rapidly growing advertising business. As more buyers and sellers join the platform, the marketplace becomes more valuable, attracting even more users. This expanding user base enhances its logistics and payment services, making transactions smoother and more reliable, further drawing in additional users. The growing ecosystem also generates more data, enabling improved personalization, advertising, and fintech services. In our view, these network effects create a virtuous cycle, reinforcing MercadoLibre’s market position and making it increasingly difficult for competitors to challenge them. Shares detracted from performance during the quarter following an unexpected fiscal third-quarter earnings miss. The earnings weakness was primarily due to faster credit card growth and a shift toward upmarket consumer lending, which pressured operating margins.”
A customer using their phone to access an online commerce platform.
MercadoLibre, Inc. (NASDAQ:MELI) is not on our list of 30 Most Popular Stocks Among Hedge Funds. As per our database, 87 hedge fund portfolios held MercadoLibre, Inc. (NASDAQ:MELI) at the end of the third quarter which was 84 in the previous quarter. MercadoLibre, Inc.’s (NASDAQ:MELI) net income rose by 11% year-over-year, reaching $397 million in the third quarter. While we acknowledge the potential of MercadoLibre, Inc. (NASDAQ:MELI) as an investment, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns, and doing so within a shorter timeframe. If you are looking for an AI stock that is as promising as NVIDIA but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
In another article we discussed MercadoLibre, Inc. (NASDAQ:MELI) and shared the list of best cyclical stocks to buy according to hedge funds. In addition, please check out our hedge fund investor letters Q3 2024 page for more investor letters from hedge funds and other leading investors.
READ NEXT: Michael Burry Is Selling These Stocks and A New Dawn Is Coming to US Stocks.
Disclosure: None. This article is originally published at Insider Monkey.