Baron Funds, an investment management company, released its “Baron FinTech Fund” fourth quarter 2024 investor letter. A copy of the letter can be downloaded here. For the fifth consecutive quarter, U.S. stocks increased, with most of the gains coming in November after the U.S. elections, which saw Republicans secure majorities in both chambers of Congress and President Donald Trump re-elected. In the fourth quarter, the fund rose 5.29% (Institutional Shares) compared to a 4.24% return for the FactSet Global FinTech Index (Benchmark) and a 2.41% gain for the S&P 500 index. Since inception, the fund has appreciated at an annualized rate of 12.17%, compared to 3.93% for the Benchmark. In addition, please check the fund’s top five holdings to know its best picks in 2024.
In its fourth quarter 2024 investor letter, Baron FinTech 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 13.51%, and its shares gained 14.18% of their value over the last 52 weeks.On February 19, 2025, MercadoLibre, Inc. (NASDAQ:MELI) stock closed at $2,075.79 per share with a market capitalization of $105.237 billion.
Baron FinTech Fund stated the following regarding MercadoLibre, Inc. (NASDAQ:MELI) in its Q4 2024 investor letter:
“MercadoLibre, Inc. (NASDAQ:MELI) is the leading e-commerce marketplace in Latin America. Shares declined due to weaker-than-expected margins in the recent quarter. Margins were pressured due to growth in the credit portfolio, accounting changes, accruals for long-term incentive plans, and investments to expand the distribution network. We see these impacts as temporary and necessary to expand MercadoLibre’s advantages in the large but competitive markets for e-commerce and financial services. Management is willing to sacrifice near-term profitability to drive faster growth and higher cash flow over the long term. We retain conviction in MercadoLibre as a prime beneficiary of the secular growth of e-commerce and greater financial inclusion in Latin America.”
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, 96 hedge fund portfolios held MercadoLibre, Inc. (NASDAQ:MELI) at the end of the fourth quarter which was 87 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 highest-priced stocks. In addition, please check out our hedge fund investor letters Q4 2024 page for more investor letters from hedge funds and other leading investors.
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Disclosure: None. This article is originally published at Insider Monkey.