The Long Investor
Airline Captain & Investment Analyst, Technical/Fundamental Analysis
Nubank, Sea Limited and MercadoLibre are all great buys now, with Bolsonaro's first-round victory in Brazil good news for Brazil-exposed names. Per @StockMarketNerd, he performed much better than polls indicated and is generally seen as the more business-friendly candidate. Emerging-market names like these also serve as hedges against the US market. x.comÂ
Political fear after Lula election wins is a buying opportunity in Brazilian stocks, including EWZ, MercadoLibre and Nu Holdings. In USD, the table shows 12-month gains of 115% after 2002, 76% after 2006 and 18.5% after 2022, though shorter-term returns varied. x.comÂ
Excellent management makes dLocal, MercadoLibre and Nu Holdings three great companies to pick up at a discount after the Lula-election selloff. Their Brazil exposure sent them down 9%, 9% and 22% on claims that the investment climate had worsened, a claim worth questioning. x.comÂ
Crowded Brazil and EWZ longs are exposed after Lula's surprise election win, as reported by negligible_cap. MercadoLibre and many others are going to get absolutely nuked tomorrow. x.comÂ
MercadoLibre and Nu Holdings have massive runways and have thrived across political backdrops, so they do not need tax cuts or deregulation to keep winning. Both have performed extremely well in Brazil under Lula since 2023, even in a fragile macro backdrop. The election-driven selloff left these cream-of-the-crop businesses at lower multiples, and more near-term selloffs are possible. x.com x.com x.com x.comÂ
Brazil's political developments have driven a selloff that makes MercadoLibre a dip opportunity. MELI is down 11% amid the market's reaction. x.comÂ
South American political unpredictability keeps investors from rewarding MercadoLibre's excellent fundamentals. Today's selloff illustrates that risk, despite the strength of the business. x.com x.comÂ
Latin American equities' sell-off looks overdone as long as the underlying businesses keep growing and fundamentals remain intact. Under that condition, the drop is market noise, and MercadoLibre and Nu Holdings could offer attractive opportunities amid the panic. x.comÂ
MercadoLibre's business results should begin inflecting as credit portfolio growth slows now that the book has reached scale. An excellent outcome in Brazil improves the economic backdrop, and the stock sat at the technical bottom of its consolidation wedge. The economic backdrop, forward results and technicals all look very bullish. x.com x.comÂ
Political uncertainty and Amazon competition have held MercadoLibre's stock back despite a humming business. The company is great and the stock deserves to turn, but at roughly 45 times earnings and only about 12% gained over five years, it has remained a difficult stock to own. x.com x.com x.com x.comÂ
Nu Holdings' US entry targets people from Latin America now living there, rather than direct competition with SoFi or Robinhood; entering the US matters much more than Brazil's election. After Lula's reelection, Nu opened down 21% and was testing its yearly lows. This dip is likely a great long-term buy. x.com x.com x.comÂ
