David DriscollMercadoLibreMELIRISKYMay 14, 2025

Investor sentiment and chart are looking rough. Secular growth story still intact. For latest quarter, revenue jumped 49% YOY. Lagged due to heavy investments into logistics and fintech, building dominant digital economy for the long term. Still sees double-digit growth of 39%, paying 36x forward PE.

Short-term pain for long-term gain.

MELI's forward growth projections are robust, and while historical growth has been strong, it has moderated over time. Margins have improved substantially, and the company produces significant free cash flow. The stock trades at a premium 40X forward earnings multiple, though this valuation has compressed in recent years. They find it attractive at current levels but note risks from geopolitical issues and potential international growth deceleration. They would be comfortable initiating a position here. Unlock Premium - Try 5i Free

It is the retail answer to Amazon in South America. It is a very dynamic company with a high valuation supported by the rate of growth in revenue, earnings and cash flow. The concern is that it covers markets in less stable countries with volatile currencies.

He's not that familiar with this one. Look at free cashflow (operating cashflow minus capex). As a tech company, 
stock-based compensation could be a potential landmine (giving out shares, but it "doesn't count" because it's not a cash item). Strong company, though some negative ROIC in the past going back to 2018 (which was before Covid). Too expensive here to buy afresh.

Leader in Central and South America. If you own it, hold, as long as returns on capital continue strong and don't turn negative. Probably a compounder, as these are winner-take-all businesses.

See his Top Picks.

"The AMZN of Latin America", without the cloud business. Largest online e-commerce and payments ecosystem in the region, active in 18 countries. Valuation's not all that bad. The fintech arm is growing faster than the e-commerce side. Shares trending higher since mid-2022. EPS growth rate forecast at 35%. One of the top EM growth stories out there. No dividend.

Like a South American version of AMZN. SA market is under-penetrated. Demographics are very favourable, as population is younger and more active in e-commerce. Growing rapidly, not that expensive. On his radar.

Really well run. Dominates Latin America. Branching out into payments, infrastructure is good. Somewhat susceptible to movements in the USD. Not sure if he sees growth overseas, as there are already big competitors in place.

It's the Amazon of South America. The recent downturn is due to profit-taking, but also fears of US tariffs against Latin America. However, this gives you exposure to Latin America.