Bill 'Latency Lord' Brennan
Fundamental Growth Investor, B2B/Sector Leaders & Picks-and-Shovels
MercadoLibre and Sea look like stocks long-term investors should be adding if oil is why they are down. Oil prices may affect such businesses today, but they are a cyclical input, not a structural cost increase, and will not matter in a normalized environment. The broader selling looks like a general emerging-markets sell-off. x.com
MercadoLibre's margin story is underappreciated: the market implies a lower EBIT margin in 2028 than today, which is implausible, leaving easy upside if operating leverage shows over the next 10 quarters. Its 3-year PEG of 0.79, on a 21.9% EBIT CAGR and 81.3% total EBIT growth through 2028, is the only one among the holdings above 0.53, reflecting the market's disbelief in its margins. x.com x.com
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.com
Nu and MercadoLibre's biggest secular-growth advantage is resilience to electoral and macro shocks. Nu hit 139 million customers and $1 billion quarterly net income through Brazil's recession, impeachment and pandemic. MercadoLibre survived the dot-com crash and devaluations; Mercado Pago has nearly 78 million monthly users and credit growth above 90% year on year. With regional e-commerce growing 15%-20% annually, their value through 2027 depends on adoption and delinquencies, not one election. … Show more
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.com
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.com
Today's fundamentals and long growth runways make Nu Holdings and MercadoLibre among the market's most compelling and mispriced opportunities for patient capital. Their short-term outlook shifts mostly with FX volatility and fiscal and monetary policy uncertainty. x.com
MercadoLibre's collapsing margins and earnings make its 45-times-earnings valuation look like a value trap. It faces intense competition, and less of its revenue reaches the bottom line; falling earnings make the stock more expensive even as its price falls. Nu Holdings trades at 17 times earnings and Inter & Co at 7 times, with both growing revenue and earnings robustly. Selling MercadoLibre to build positions in companies with better fundamentals is under consideration. x.com x.com x.com x.com
MercadoLibre and Sea offer real geographic diversification because, unlike international names such as TSMC, they have relatively little US dependence. Both have robust business models, strong management and a clear growth runway for years to come. x.com
The election news is more bark than bite for Nu Holdings, MercadoLibre, StoneCo and PagSeguro. Funds and institutions seem to have been caught off guard and need to unwind positioning; the four should recover nicely over the next few weeks or months. x.com
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.com
Brazil's political developments have driven a selloff that makes MercadoLibre a dip opportunity. MELI is down 11% amid the market's reaction. x.com
