Business Update - Mercado Libre (MELI) Q4'24 - 25 Year Anniversary of Compounding Investments
Reinvestments in users UX/UI, logistics and fintech accelerate. Shares +8% making an new all time high. I am patiently waiting to add more shares.
Important notice: prices have been updated to Ā£399/yearly and Ā£79/monthly as pre-announced in December and reminded in January. The āpay riseā will help me maintain a 100% success rate (50% average return per pick). Check the latest Sleep Well Portfolio performance here.
Mercado Libre (MELI), the 16th sleep-well pick, reported fantastic Q4ā24 earnings. The company's messages and actions ooze owner-operator execution. It also marks the 25 years of democratizing trade and financial services to the region.
TheyĀ walk the talk,Ā focus on the long term, and emphasizeĀ reinvesting in the businessĀ to improve customer value, fortify the ecosystem, deter competition, and put their best foot forward to capture the enormous opportunity ahead in Latin America.Ā
I love owning businesses like this.
How enormous is the opportunity for Meli?
Only 15% of commerce in the region is online, a decade behind the US/EU/China, which is at 30-40%. In fintech, Meli has an opportunity to capture 125 million unbanked people, half of whom are in Mexico. Leveraging the growing ecosystem and following the proven Amazon playbook, Meliās advertising execution has already reached the $1B run rate, growing at over 50% for the last eight quarters (41% in Q4ā24, 37% in Q3ā24). It wonāt be linear, but Amazon has achieved a 40% CAGR since reaching the $1B mark in 2014 to reach $51B annually today.
As an owner, I am always excited to digest Meliās reports. Unfortunately, unlike the 16% drop in shares after business-as-usual Q3ā24, shares are up 8%. Yes, I want the share price to stay low to keep adding with every penny I find.
Charlie Munger would also add to āinvert, always invert.ā
Iāll wait in the left queue for better days. If I donāt get it, fine. I already have ~20% of the Sleep Well Portfolio and over 20% in my portfolio. But if you hadnāt owned Meli, Iād read on.
Before we begin digesting Melās Q4, please do me a favor. I put enormous research and portfolio management discipline behind the results, which premium members have benefited from. Please help me spread the word to improve the quality even further.
Since going paid in the summer of 2023,
We have had no loser in the Sleep Well Portfolio. The average gain reached 50% per pick money-weighted and 72% time-weighted.
Seventeen picks have had an average return of 36% since publication. You buy when I publish a deep dive and still achieve positive returns.
Quality > Quantity.
How?
I track all my picks thoroughly and individually (no boilerplate analysis; I donāt aim to pump out content quickly). None are ChatGPT generated.
I compile all thesis tracking here and link it in the Sleep Well Portfolio spreadsheet (annual sub only). You can also access all buy-and-sell and deep dives.
Meliās writeups: The Most Sleep Well Investment Of LATAM, Top pick for 2025, Q3ā24 update, and Buy Alert.
For all sleep-well writeups, please click this link.
Meli Q4ā24 and FY2024 results
I remain laser-focused on what MeliĀ says and actsĀ to achieve its goals in 10-20 years, 2037, to be precise, the year I hand over the Sleep Well Portfolio to my daughters. So, Wall Streetās ābeat & missesā record means very little to me.
With that investing horizon, what makes Meli or any of my picks successful depends on four points: