Offshore
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โ Dimitry Nakhla | Babylon Capitalยฎ
MercadoLibre $MELI stock is up +28.91% YTD & yet the company trades for a valuation ~7% CHEAPER than it was at the start of the year ๐ธ
Strong stock price, stronger fundamentals ๐๐ฝ https://t.co/Prjeh9bW3i
A quality valuation analysis on $MELI ๐ง๐ฝโโ๏ธ
โขNTM P/E Ratio: 44.66x
โข1-Year Mean: 47.97x
As you can see, $MELI appears to be trading near fair value
Going forward, investors can receive ~7% MORE in earnings per share ๐ง ***
Before we get into valuation, letโs take a look at why $MELI is a great business
BALANCE SHEETโ
โขCash & Short-Term Inv: $3.70B
โขLong-Term Debt: $2.82B
$MELI has a strong balance sheet, an ok BB+ S&P Credit Rating & 48x FFO Interest Coverage
RETURN ON CAPITAL๐โก๏ธโ
โข2019: (4.8%)
โข2020: 3.7%
โข2021: 8.1%
โข2022: 14.7%
โข2023: 25.7%
โข2024: 23.0%
RETURN ON EQUITY๐โก๏ธโ
โข2019: (14.2%)
โข2020: (0.1%)
โข2021: 5.2%
โข2022: 28.7%
โข2023: 40.3%
โข2024: 51.5%
$MELI has strong and improved return metrics, highlighting the financial efficiency of the business
REVENUESโ
โข2019: $2.30B
โข2024: $20.78B
โขCAGR: 55.30%
FREE CASH FLOWโ
โข2019: $314.29M
โข2024: $7.05B
โขCAGR: 86.32%
NORMALIZED EPSโ
โข2019: ($3.71)
โข2024: $37.69
SHARE BUYBACKSโ
โข2019 Shares Outstanding: 48.69M
โขLTM Shares Outstanding: 50.70M
MARGINS๐โก๏ธโ
โขLTM Gross Margins: 52.7%
โขLTM Operating Margins: 12.7%
โขLTM Net Income Margins: 9.2%
***NOW TO VALUATION ๐ง
As stated above, investors can expect to receive ~7% MORE in EPS
Using Benjamin Grahamโs 2G rule of thumb, $MELI has to grow earnings at a 22.33% CAGR over the next several years to justify its valuation
Today, analysts anticipate 2025 - 2027 EPS growth over the next few years to be more than the (22.33%) required growth rate:
2025E: $46.91 (24.5% YoY)
2026E: $64.98 (38.5% YoY)
2027E: $84.98 (30.8% YoY)
$MELI has an ok track record of meeting analyst estimates ~2 years out, but letโs assume $MELI ends 2027 with $84.98 in EPS & see its CAGR potential assuming different multiples
40x P/E: $3400๐ต โฆ ~17.6% CAGR
38x P/E: $3230๐ต โฆ ~15.4% CAGR
36x P/E: $3060๐ต โฆ ~13.2% CAGR
34x P/E: $2890๐ต โฆ ~10.9% CAGR
As you can see, $MELI appears to have attractive return potential IF we assume >36x earnings (a multiple justified by its growth rate & moat)
$MELI boasts an expansive growth trajectory, fueled by powerful network effects that should drive sustained momentum
Key factors contributing to its promising outlook include ๐
1. Margin expansion
2. Unparalleled access to Latin America's burgeoning economy
3. Network effects that produce self-reinforcing dynamics ensuring long-term competitiveness, among other things
Those buying $MELI today at $2165๐ต are buying it for a fair price, with little margin of safety โ however, these growth rates have to be revised down substantially for $MELI to miss the mark, even if the company grows earnings at 25% CAGR over the next 5 years, shareholders will likely end up with a decent return
I consider $MELI a strong buy closer to $1945๐ต (~10% below todayโs price) where I can reasonably expect ~12% CAGR while assuming a conservative 32x end multiple, ensuring some margin of safety
#stocks #investing
___
๐๐๐๐๐๐๐๐๐๐โผ๏ธ: ๐๐ก๐ข๐ฌ ๐ข๐ฌ ๐๐๐ ๐๐ง๐ฏ๐๐ฌ๐ญ๐ฆ๐๐ง๐ญ ๐๐๐ฏ๐ข๐๐. ๐๐๐๐ฒ๐ฅ๐จ๐ง ๐๐๐ฉ๐ข๐ญ๐๐ฅยฎ ๐๐ง๐ ๐ข๐ญ๐ฌ ๐ซ๐๐ฉ๐ซ๐๐ฌ๐๐ง๐ญ๐๐ญ๐ข๐ฏ๐๐ฌ ๐ฆ๐๐ฒ ๐ก๐๐ฏ๐ ๐ฉ๐จ๐ฌ๐ข๐ญ๐ข๐จ๐ง๐ฌ ๐ข๐ง ๐ญ๐ก๐ ๐ฌ๐๐๐ฎ๐ซ๐ข๐ญ๐ข๐๐ฌ ๐๐ข๐ฌ๐๐ฎ๐ฌ๐ฌ๐๐ ๐ข๐ง ๐ญ๐ก๐ข๐ฌ ๐ญ๐ฐ๐๐๐ญ.
๐๐ก๐ ๐ข๐ง๐๐จ๐ซ๐ฆ๐๐ญ๐ข๐จ๐ง ๐๐จ๐ง๐ญ๐๐ข๐ง๐๐ ๐ข๐ง ๐ญ๐ก๐ข๐ฌ ๐ญ๐ฐ๐๐๐ญ ๐ข๐ฌ ๐ข๐ง๐ญ๐๐ง๐๐๐ ๐๐จ๐ซ ๐ข๐ง๐๐จ๐ซ๐ฆ๐๐ญ๐ข๐จ๐ง๐๐ฅ ๐ฉ๐ฎ๐ซ๐ฉ๐จ๐ฌ๐๐ฌ ๐จ๐ง๐ฅ๐ฒ ๐๐ง๐ ๐ฌ๐ก๐จ๐ฎ๐ฅ๐ ๐ง๐จ๐ญ ๐๐ ๐๐จ๐ง๐ฌ๐ญ๐ซ๐ฎ๐๐ ๐๐ฌ ๐ข๐ง๐ฏ๐๐ฌ๐ญ๐ฆ๐๐ง๐ญ ๐๐๐ฏ๐ข๐๐ ๐ญ๐จ ๐ฆ๐๐๐ญ ๐ญ๐ก๐ ๐ฌ๐ฉ๐๐๐ข๐๐ข๐ ๐ง๐๐๐๐ฌ ๐จ[...]
MercadoLibre $MELI stock is up +28.91% YTD & yet the company trades for a valuation ~7% CHEAPER than it was at the start of the year ๐ธ
Strong stock price, stronger fundamentals ๐๐ฝ https://t.co/Prjeh9bW3i
A quality valuation analysis on $MELI ๐ง๐ฝโโ๏ธ
โขNTM P/E Ratio: 44.66x
โข1-Year Mean: 47.97x
As you can see, $MELI appears to be trading near fair value
Going forward, investors can receive ~7% MORE in earnings per share ๐ง ***
Before we get into valuation, letโs take a look at why $MELI is a great business
BALANCE SHEETโ
โขCash & Short-Term Inv: $3.70B
โขLong-Term Debt: $2.82B
$MELI has a strong balance sheet, an ok BB+ S&P Credit Rating & 48x FFO Interest Coverage
RETURN ON CAPITAL๐โก๏ธโ
โข2019: (4.8%)
โข2020: 3.7%
โข2021: 8.1%
โข2022: 14.7%
โข2023: 25.7%
โข2024: 23.0%
RETURN ON EQUITY๐โก๏ธโ
โข2019: (14.2%)
โข2020: (0.1%)
โข2021: 5.2%
โข2022: 28.7%
โข2023: 40.3%
โข2024: 51.5%
$MELI has strong and improved return metrics, highlighting the financial efficiency of the business
REVENUESโ
โข2019: $2.30B
โข2024: $20.78B
โขCAGR: 55.30%
FREE CASH FLOWโ
โข2019: $314.29M
โข2024: $7.05B
โขCAGR: 86.32%
NORMALIZED EPSโ
โข2019: ($3.71)
โข2024: $37.69
SHARE BUYBACKSโ
โข2019 Shares Outstanding: 48.69M
โขLTM Shares Outstanding: 50.70M
MARGINS๐โก๏ธโ
โขLTM Gross Margins: 52.7%
โขLTM Operating Margins: 12.7%
โขLTM Net Income Margins: 9.2%
***NOW TO VALUATION ๐ง
As stated above, investors can expect to receive ~7% MORE in EPS
Using Benjamin Grahamโs 2G rule of thumb, $MELI has to grow earnings at a 22.33% CAGR over the next several years to justify its valuation
Today, analysts anticipate 2025 - 2027 EPS growth over the next few years to be more than the (22.33%) required growth rate:
2025E: $46.91 (24.5% YoY)
2026E: $64.98 (38.5% YoY)
2027E: $84.98 (30.8% YoY)
$MELI has an ok track record of meeting analyst estimates ~2 years out, but letโs assume $MELI ends 2027 with $84.98 in EPS & see its CAGR potential assuming different multiples
40x P/E: $3400๐ต โฆ ~17.6% CAGR
38x P/E: $3230๐ต โฆ ~15.4% CAGR
36x P/E: $3060๐ต โฆ ~13.2% CAGR
34x P/E: $2890๐ต โฆ ~10.9% CAGR
As you can see, $MELI appears to have attractive return potential IF we assume >36x earnings (a multiple justified by its growth rate & moat)
$MELI boasts an expansive growth trajectory, fueled by powerful network effects that should drive sustained momentum
Key factors contributing to its promising outlook include ๐
1. Margin expansion
2. Unparalleled access to Latin America's burgeoning economy
3. Network effects that produce self-reinforcing dynamics ensuring long-term competitiveness, among other things
Those buying $MELI today at $2165๐ต are buying it for a fair price, with little margin of safety โ however, these growth rates have to be revised down substantially for $MELI to miss the mark, even if the company grows earnings at 25% CAGR over the next 5 years, shareholders will likely end up with a decent return
I consider $MELI a strong buy closer to $1945๐ต (~10% below todayโs price) where I can reasonably expect ~12% CAGR while assuming a conservative 32x end multiple, ensuring some margin of safety
#stocks #investing
___
๐๐๐๐๐๐๐๐๐๐โผ๏ธ: ๐๐ก๐ข๐ฌ ๐ข๐ฌ ๐๐๐ ๐๐ง๐ฏ๐๐ฌ๐ญ๐ฆ๐๐ง๐ญ ๐๐๐ฏ๐ข๐๐. ๐๐๐๐ฒ๐ฅ๐จ๐ง ๐๐๐ฉ๐ข๐ญ๐๐ฅยฎ ๐๐ง๐ ๐ข๐ญ๐ฌ ๐ซ๐๐ฉ๐ซ๐๐ฌ๐๐ง๐ญ๐๐ญ๐ข๐ฏ๐๐ฌ ๐ฆ๐๐ฒ ๐ก๐๐ฏ๐ ๐ฉ๐จ๐ฌ๐ข๐ญ๐ข๐จ๐ง๐ฌ ๐ข๐ง ๐ญ๐ก๐ ๐ฌ๐๐๐ฎ๐ซ๐ข๐ญ๐ข๐๐ฌ ๐๐ข๐ฌ๐๐ฎ๐ฌ๐ฌ๐๐ ๐ข๐ง ๐ญ๐ก๐ข๐ฌ ๐ญ๐ฐ๐๐๐ญ.
๐๐ก๐ ๐ข๐ง๐๐จ๐ซ๐ฆ๐๐ญ๐ข๐จ๐ง ๐๐จ๐ง๐ญ๐๐ข๐ง๐๐ ๐ข๐ง ๐ญ๐ก๐ข๐ฌ ๐ญ๐ฐ๐๐๐ญ ๐ข๐ฌ ๐ข๐ง๐ญ๐๐ง๐๐๐ ๐๐จ๐ซ ๐ข๐ง๐๐จ๐ซ๐ฆ๐๐ญ๐ข๐จ๐ง๐๐ฅ ๐ฉ๐ฎ๐ซ๐ฉ๐จ๐ฌ๐๐ฌ ๐จ๐ง๐ฅ๐ฒ ๐๐ง๐ ๐ฌ๐ก๐จ๐ฎ๐ฅ๐ ๐ง๐จ๐ญ ๐๐ ๐๐จ๐ง๐ฌ๐ญ๐ซ๐ฎ๐๐ ๐๐ฌ ๐ข๐ง๐ฏ๐๐ฌ๐ญ๐ฆ๐๐ง๐ญ ๐๐๐ฏ๐ข๐๐ ๐ญ๐จ ๐ฆ๐๐๐ญ ๐ญ๐ก๐ ๐ฌ๐ฉ๐๐๐ข๐๐ข๐ ๐ง๐๐๐๐ฌ ๐จ[...]
Offshore
โ Dimitry Nakhla | Babylon Capitalยฎ MercadoLibre $MELI stock is up +28.91% YTD & yet the company trades for a valuation ~7% CHEAPER than it was at the start of the year ๐ธ Strong stock price, stronger fundamentals ๐๐ฝ https://t.co/Prjeh9bW3i A quality valuationโฆ
๐ ๐๐ง๐ฒ ๐ข๐ง๐๐ข๐ฏ๐ข๐๐ฎ๐๐ฅ ๐จ๐ซ ๐ฌ๐ข๐ญ๐ฎ๐๐ญ๐ข๐จ๐ง. ๐๐๐ฌ๐ญ ๐ฉ๐๐ซ๐๐จ๐ซ๐ฆ๐๐ง๐๐ ๐ข๐ฌ ๐ง๐จ ๐ ๐ฎ๐๐ซ๐๐ง๐ญ๐๐ ๐จ๐ ๐๐ฎ๐ญ๐ฎ๐ซ๐ ๐ซ๐๐ฌ๐ฎ๐ฅ๐ญ๐ฌ.
๐๐ง๐๐จ๐ซ๐ฆ๐๐ญ๐ข๐จ๐ง ๐๐จ๐ง๐ญ๐๐ข๐ง๐๐ ๐ข๐ง ๐ญ๐ก๐ข๐ฌ ๐ญ๐ฐ๐๐๐ญ ๐ก๐๐ฌ ๐๐๐๐ง ๐จ๐๐ญ๐๐ข๐ง๐๐ ๐๐ซ๐จ๐ฆ ๐ฌ๐จ๐ฎ๐ซ๐๐๐ฌ ๐๐๐ฅ๐ข๐๐ฏ๐๐ ๐ญ๐จ ๐๐ ๐ซ๐๐ฅ๐ข๐๐๐ฅ๐, ๐๐ฎ๐ญ ๐ข๐ฌ ๐ง๐จ๐ญ ๐ ๐ฎ๐๐ซ๐๐ง๐ญ๐๐๐ ๐๐ฌ ๐ญ๐จ ๐๐จ๐ฆ๐ฉ๐ฅ๐๐ญ๐๐ง๐๐ฌ๐ฌ ๐จ๐ซ ๐๐๐๐ฎ๐ซ๐๐๐ฒ. - Dimitry Nakhla | Babylon Capitalยฎ tweet
๐๐ง๐๐จ๐ซ๐ฆ๐๐ญ๐ข๐จ๐ง ๐๐จ๐ง๐ญ๐๐ข๐ง๐๐ ๐ข๐ง ๐ญ๐ก๐ข๐ฌ ๐ญ๐ฐ๐๐๐ญ ๐ก๐๐ฌ ๐๐๐๐ง ๐จ๐๐ญ๐๐ข๐ง๐๐ ๐๐ซ๐จ๐ฆ ๐ฌ๐จ๐ฎ๐ซ๐๐๐ฌ ๐๐๐ฅ๐ข๐๐ฏ๐๐ ๐ญ๐จ ๐๐ ๐ซ๐๐ฅ๐ข๐๐๐ฅ๐, ๐๐ฎ๐ญ ๐ข๐ฌ ๐ง๐จ๐ญ ๐ ๐ฎ๐๐ซ๐๐ง๐ญ๐๐๐ ๐๐ฌ ๐ญ๐จ ๐๐จ๐ฆ๐ฉ๐ฅ๐๐ญ๐๐ง๐๐ฌ๐ฌ ๐จ๐ซ ๐๐๐๐ฎ๐ซ๐๐๐ฒ. - Dimitry Nakhla | Babylon Capitalยฎ tweet
Offshore
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โ Quiver Quantitative
Triata Capital, run by Sean Ho, has made an estimated 45% return on its stock portfolio so far this year.
Hereโs what theyโre doing ๐งต https://t.co/xjdGaMvmwH
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Triata Capital, run by Sean Ho, has made an estimated 45% return on its stock portfolio so far this year.
Hereโs what theyโre doing ๐งต https://t.co/xjdGaMvmwH
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Offshore
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โ The Kobeissi Letter
BREAKING: Leveraged long equity ETFs assets have dropped $15 billion so far this quarter, to $80 billion, the lowest since Q1 2024.
In other words, nearly 75% of AUM gains over the last 3 quarters have been erased.
However, total assets in leveraged long funds are still 2.5 TIMES larger than the Q3 2022 low of $32 billion.
Meanwhile, leveraged short ETF assets have risen by ~$800 million, to $9.3 billion.
Therefore, for $1 in leveraged short ETFs, there are $9 in leveraged long ETFs, down from $11 at the end of 2024.
Despite the selloff risk appetite is still elevated.
tweet
BREAKING: Leveraged long equity ETFs assets have dropped $15 billion so far this quarter, to $80 billion, the lowest since Q1 2024.
In other words, nearly 75% of AUM gains over the last 3 quarters have been erased.
However, total assets in leveraged long funds are still 2.5 TIMES larger than the Q3 2022 low of $32 billion.
Meanwhile, leveraged short ETF assets have risen by ~$800 million, to $9.3 billion.
Therefore, for $1 in leveraged short ETFs, there are $9 in leveraged long ETFs, down from $11 at the end of 2024.
Despite the selloff risk appetite is still elevated.
tweet
Offshore
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โ Finding Compounders
โWhen stocks get cheaper; How can that not be good newsโ
Wall Streetโs Wisest Man : Charles D Ellis
By Jason Zweig https://t.co/zDCH8BtSbr
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โWhen stocks get cheaper; How can that not be good newsโ
Wall Streetโs Wisest Man : Charles D Ellis
By Jason Zweig https://t.co/zDCH8BtSbr
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Offshore
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โ The Kobeissi Letter
Some exciting news:
We have been nominated for the "Market Newsletter of the Year" award at the @StockTwits Cashtag Awards.
If you enjoy our work, please consider voting for us at the link in the post below! https://t.co/le26MF8htN
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Some exciting news:
We have been nominated for the "Market Newsletter of the Year" award at the @StockTwits Cashtag Awards.
If you enjoy our work, please consider voting for us at the link in the post below! https://t.co/le26MF8htN
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AkhenOsiris
Toronto Star:
Canada could be on the lower end of U.S. President Donald Trumpโs threatened global tariffs next week, the Star has learned.
Nothing, however, is guaranteed until Trump decides ahead of his April 2 deadline โ which heโs dubbed โliberation dayโ for America โ and no government officials are taking any assurances for granted, sources said.
As the tense cross-border relationship plays out on the federal election campaign trail, Canadian sources with knowledge of discussions between the two countries say White House officials have suggested Trump may impose three escalating levels of tariffs on Americaโs trading partners, with Canada getting hit on the lower end of the scale.
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Toronto Star:
Canada could be on the lower end of U.S. President Donald Trumpโs threatened global tariffs next week, the Star has learned.
Nothing, however, is guaranteed until Trump decides ahead of his April 2 deadline โ which heโs dubbed โliberation dayโ for America โ and no government officials are taking any assurances for granted, sources said.
As the tense cross-border relationship plays out on the federal election campaign trail, Canadian sources with knowledge of discussions between the two countries say White House officials have suggested Trump may impose three escalating levels of tariffs on Americaโs trading partners, with Canada getting hit on the lower end of the scale.
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Offshore
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โ The Kobeissi Letter
US executives are rushing to buy stocks:
The ratio of companies where insiders purchased their own stock versus sold rose to 0.5 in March, the highest since June 2024.
This puts the ratio back to near its historical average, according to Washington Service data.
This is a sharp reversal from 0.2 recorded in January, which was the lowest since 1988, when data began.
Recent insider buying may be a sign of confidence in the economy and their businesses.
However, the level of buying is still well below the peaks seen at the end of 2018, near the 2020 pandemic low, and the 2022 bear market.
Are corporate insiders signaling the sell-off is overdone?
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US executives are rushing to buy stocks:
The ratio of companies where insiders purchased their own stock versus sold rose to 0.5 in March, the highest since June 2024.
This puts the ratio back to near its historical average, according to Washington Service data.
This is a sharp reversal from 0.2 recorded in January, which was the lowest since 1988, when data began.
Recent insider buying may be a sign of confidence in the economy and their businesses.
However, the level of buying is still well below the peaks seen at the end of 2018, near the 2020 pandemic low, and the 2022 bear market.
Are corporate insiders signaling the sell-off is overdone?
tweet
โ Dimitry Nakhla | Babylon Capitalยฎ
10 High-Quality Sticky Stocks That Increased Revenues Annually in the Past 10 Years ๐
1. Fair Isaac $FICO ๐ฐ
โข(+8.08% CAGR)
2. Equifax $EFX ๐ธ
โข(+8.83)% CAGR
3. IDEXX Labs $IDXX ๐ถ
โข(+10.12% CAGR)
4. S&P Global $SPGI ๐ต
โข(+10.89% CAGR)
5. MSCI Inc $MSCI ๐
โข(+11.10% CAGR)
6. Cadence Design $CDNS ๐พ
โข(+11.37% CAGR)
7. Synopsys $SNPS ๐พ
โข(+11.53% CAGR)
8 Intercontinental Exchange $ICE ๐ฆ
โข (+11.61% CAGR)
9. Amazon $AMZN ๐ฆ
โข(+21.77% CAGR)
10. Medpace $MEDP ๐ฅ
โข(+21.94% CAGR)
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10 High-Quality Sticky Stocks That Increased Revenues Annually in the Past 10 Years ๐
1. Fair Isaac $FICO ๐ฐ
โข(+8.08% CAGR)
2. Equifax $EFX ๐ธ
โข(+8.83)% CAGR
3. IDEXX Labs $IDXX ๐ถ
โข(+10.12% CAGR)
4. S&P Global $SPGI ๐ต
โข(+10.89% CAGR)
5. MSCI Inc $MSCI ๐
โข(+11.10% CAGR)
6. Cadence Design $CDNS ๐พ
โข(+11.37% CAGR)
7. Synopsys $SNPS ๐พ
โข(+11.53% CAGR)
8 Intercontinental Exchange $ICE ๐ฆ
โข (+11.61% CAGR)
9. Amazon $AMZN ๐ฆ
โข(+21.77% CAGR)
10. Medpace $MEDP ๐ฅ
โข(+21.94% CAGR)
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