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Here’s Why MercadoLibre Inc. (MELI) Landed in Baron FinTech’s Detractor List

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·3 min read
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Baron Funds, an asset management firm, published its “Baron FinTech Fund” first quarter 2021 investor letter – a copy of which can be downloaded here. A return of 1.29% was delivered by the fund’s institutional shares for the Q1 of 2021, trailing the S&P 500 Index, which appreciated 6.17%, and modestly underperforming the FactSet Global FinTech Index which rose 2.77% for the same period. You can view the fund’s top 5 holdings to have a peek at their top bets for 2021.

Baron FinTech Fund, in its Q1 2021 investor letter, mentioned MercadoLibre, Inc. (NASDAQ: MELI), and shared their insights on the company. MercadoLibre, Inc. is a Buenos Aires, Argentina-based online marketplace company that currently has a $65.9 billion market capitalization. Since the beginning of the year, MELI delivered a -21.02% return, while its 12-month gains are up by 70.71%. As of May 14, 2021, the stock closed at $1,323.10 per share.

Here is what Baron FinTech Fund has to say about MercadoLibre, Inc. in its Q1 2021 investor letter:

"MercadoLibre, Inc., a Latin American e-commerce and FinTech platform, declined in the quarter despite reporting very strong fourth quarter results. MercadoLibre falls into a category of businesses that were net beneficiaries of last year’s lockdowns and reduced consumer gatherings that fell out of favor this quarter as investors looked toward economic reopening and normalization. We are confident in MercadoLibre’s ability to create substantial long-term value as it grows into a regional powerhouse across e-commerce and financial services."

fastest growing ecommerce companies
fastest growing ecommerce companies

Stanisic Vladimir/Shutterstock.com

Our calculations show that MercadoLibre, Inc. (NASDAQ: MELI) does not belong in our list of the 30 Most Popular Stocks Among Hedge Funds. As of the end of the fourth quarter of 2020, MercadoLibre, Inc. was in 79 hedge fund portfolios, compared to 81 funds in the third quarter. MELI delivered a -31.90% return in the past 3 months.

The top 10 stocks among hedge funds returned 231.2% between 2015 and 2020, and outperformed the S&P 500 Index ETFs by more than 126 percentage points. We know it sounds unbelievable. You have been dismissing our articles about top hedge fund stocks mostly because you were fed biased information by other media outlets about hedge funds’ poor performance. You could have doubled the size of your nest egg by investing in the top hedge fund stocks instead of dumb S&P 500 ETFs. Here you can watch our video about the top 5 hedge fund stocks right now. All of these stocks had positive returns in 2020.

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Disclosure: None. This article is originally published at Insider Monkey.