MercadoLibre has formed a flat base with a buy point of 2,635.88. This is an earlier-stage base that can net higher gains after a strong breakout. Strong fundamentals and technical performance make MercadoLibre stock Tuesday's pick for IBD 50 Stocks To Watch.
MercadoLibre runs online commerce platforms for businesses and individuals in Latin America. The Latin American e-commerce behemoth is an Amazon rival. However, while Amazon has turned to artificial intelligence and the cloud for growth, MercadoLibre has a foot in the door of the crypto world.
The e-commerce behemoth holds an ideal Composite Rating and EPS Rating of 99. Shares have outperformed 91% of other stocks in the Investor's Business Daily database over the past 52 weeks, giving the stock an impressive Relative Strength Rating of 91.
Adding to that strong profile, the Up/Down Volume Ratio of 1.5 indicates that demand for the stock has been running high over the recent 50 trading days.
Based in Montevideo, Uruguay, the company posted first-quarter results on May 7. Earnings increased 44% to $9.74 per share, and sales grew 37% to $5.9 billion.
MercadoLibre stock ranks second in the retail internet group, according to IBD Stock Checkup. The group holds an elevated 9th place among Investor's Business Daily's 197 industry groups.
MercadoLibre Stock: Fintech, Crypto Play
The company has diversified business streams. MercadoLibre Marketplace is an automated online commerce platform that allows users to list, sell and buy products online. The company also has a fintech platform called Mercado Pago that facilitates transactions on the company's marketplaces. It allows users to send and receive payments online, as well. Users can also invest in their Mercado Pago accounts using an investment feature called Mercado Fondo.
Also, the platform allows users to transfer money through the website or on the app and invest in digital assets like bitcoin on Mercado Bitcoin.
MercadoLibre launched its stablecoin pegged to the U.S. dollar in August last year. More recently, stablecoins have been getting attention after the Senate passed the Genius Act, which establishes a framework for regulating stablecoins.
The company also operates Mercado Credito, which extends credit and loans to businesses and individuals. Its logistics business, called Mercado Envios, helps sellers use third-party carriers, warehousing services, and other logistics services.
An online classifieds listing platform, MercadoLibre Classifieds, and an ad platform, MercadoLibre Ads, are also run by MercadoLibre.
Shares have gained 44% year to date, going by Monday's closing price.
Cathie Wood ETF Holding
Mutual funds own 55% of the stock.
More funds have been adding shares over the past seven quarters, though in recent weeks, funds have not been net buyers, going by its Accumulation/Distribution Rating of C+, according to IBD MarketSurge data.
Exchange traded funds hold the growth stock, too. Cathie Wood's ARK Fintech Innovation ETF holds shares of MercadoLibre stock. In the IBD mutual fund index, the Virtus: KAR Mid-Cap Growth Fund (PHSKX) holds shares of MercadoLibre stock.
Please follow VRamakrishnan on X/Twitter for more news on the stock market today.
