We recently published a list of Billionaire Stanley Druckenmiller’s Top 10 Stock Picks. In this article, we are going to take a look at where MercadoLibre, Inc. (NASDAQ:MELI) stands against other stock picks of Billionaire Stanley Druckenmiller.
Druckenmiller on the Fed’s Actions
On November 6, billionaire Stanley Druckenmiller appeared in a podcast, In Good Company, hosted by Nicolai Tangen, CEO of Norges Bank Investment Management. Druckenmiller shared his opinion on the easing cycle and the role of the Fed in the current economic backdrop. He shared that he is primarily keeping a close look at companies and is not seeing any signs of weakness, other than the housing market, that too because of elevated price levels. He also added that for the next 3 to 6 months, he does not expect any economic problems to overshadow the market.
Druckenmiller emphasized that the financial conditions are of more interest to him and that they have been very “loose, looser than they were when the Fed actually started tightening.” He is also particularly interested to see if the market is currently in the “70s rally since 2021” when the inflationary period started, expressing his concerns over inflation moving forward. In addition to inflationary concerns, Druckenmiller is also worried that the Fed had declared victory a tad bit early, lacking confidence in the current market backdrop.
He believes that with a 50 basis point cut, roaring equities, and no material weakness, the market may turn up again. Druckenmiller added that the Fed is “obsessed” with a soft landing and emphasized that “fine-tuning” and “worrying about a soft landing” is not their job. The reason why there is an urgency for a soft landing is because the Fed let the inflation rate jump in the first place, he added. Speaking of the Fed’s actions and forward guidance, Druckenmiller highlighted that the Fed believes that if it changes its due course of action, it may lose credibility, leaving its hands tied.
Stanley Druckenmiller is an American billionaire, investor, and founder of Duquesne Capital, with a net worth of $6.9 billion, as of December 14, 2024. Druckenmiller has made a fortune as a hedge fund manager for 30 big years and now manages money from his family office. He also worked with George Soros until 2000, a renowned investor known for shorting the pound in 1992. He also shares interesting opinions on the money market and the economy. In Q3 2024, Druckenmiller initiated 33 new positions, ending the quarter with a portfolio of $2.95 billion in 13F securities. With that, let’s discuss his top stock picks as of Q3 2024.
Our Methodology
We scanned Duquesne Capital’s Q3 2024 portfolio and picked the fund’s top 13F holdings. Additionally, we’ve also added overall hedge fund sentiment for each stock, as of Q3 2024.
Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 275% since May 2014, beating its benchmark by 150 percentage points (see more details here).
A customer using their phone to access an online commerce platform.
MercadoLibre, Inc. (NASDAQ:MELI)
Duquesne Capital’s Stake Value: $98,720,000
Number of Hedge Fund Holders: 87
MercadoLibre, Inc. (NASDAQ:MELI) is an online marketplace headquartered in Uruguay. The company was founded in 1999 and is now present in 18 countries and has over 65 million buyers and 12 million sellers. Unique active buyers reached 61 million during the third quarter of 2024, up from 50 million in the third quarter of 2023, representing a solid growth trajectory.
MercadoLibre, Inc. (NASDAQ:MELI) is one of the largest e-commerce companies in Latin America and recorded $12.9 billion in gross merchandise volume in the third quarter of 2024, up by 14%, and sold nearly 456 million items, up from 357 million items in the third quarter of 2023. Overall, the company’s commerce segment saw a 48% increase in revenues and financial income from the same period last year.
While MELI shares a solid growth trajectory, it is not limited to its financial performance and growing user base in e-commerce. MercadoLibre, Inc. (NASDAQ:MELI) is also expanding its financial services segment rapidly, by acquiring new customers in key markets, with revenues and financial income growing by 215% year-over-year. In the third quarter of 2024, the company saw a 35% year-over-year increase in monthly active users, which reached 56 million.
Polen Capital’s Polen International Growth Strategy stated the following regarding MercadoLibre, Inc. (NASDAQ:MELI) in its Q3 2024 investor letter:
“MercadoLibre, Inc. (NASDAQ:MELI) is Latin America’s largest ecommerce business and an increasingly important player in payments and credit lending Recent earnings results show acceleration in the underlying business despite a challenging macro environment. Management continues to execute very well, taking market share in ecommerce while expanding their offerings in fintech to their user base of over 150 million people. Earlier in 2024, we expected profit margins, which had expanded significantly in recent years, to contract slightly. We see ongoing product development and fulfillment capabilities investments as sound outlays to support longer-term growth.”
Overall, MELI ranks 7th on our list of Billionaire Stanley Druckenmiller’s stock picks. While we acknowledge the potential of MELI to grow, our conviction lies in the belief that certain AI stocks hold greater promise for delivering higher returns, and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than MELI but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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Disclosure: None. This article is originally published at Insider Monkey.
