Breakout Stocks Alerts
Adding Shares on Weakness
Shares of One-rated model portfolio holding MercadoLibre (MELI:Nasdaq) are trading lower today on no major company- specific news. We're going to use the weakness to add to our position, buying 100 shares after you receive this Alert. Shares were recently trading at $19.95, down about 3%.The biggest recent news for MercadoLibre has been the temporary suspension of new listings on its TuCarro Web site. In an Alert on May 19, we noted that the Venezuelan government had been cracking down on car dealers in an effort to tighten its grip on car prices. The action had nothing to do with MercadoLibre; it was simply a matter of the government reinforcing its price control policies by targeting dealers who were looking to sell cars at above- market prices.
In an 8-K filed Wednesday, the company said the suspension has been lifted. Notes from analysts at Citigroup and Bank of America/Merrill Lynch were positive on the outcome, as the Venezuelan government allowed operations to resume with only a few modest disclosure requirements for MercadoLibre. TuCarro generates about one-quarter of the company's Venezuelan revenue, which works out to about 5% of total revenue. We believe the recent weakness in the stock is a result of investors trying to figure out how much of an impact the 19-day suspension will have on the next quarterly earnings announcement, which won't happen until sometime between late July and mid-August.
We expect shares of MercadoLibre to remain volatile, based on the speculative nature of the Latin American Internet market as well as the effects of currency fluctuations on near-term results. We initiated a relatively small initial position in April when shares were trading below $22, saying that we planned on adding to our stake if the momentum faded and shares fell back into the midteens. There's certainly the potential for the stock to trade lower if sentiment remains poor, but we're comfortable adding at the current level and still have room to increase our position size in the future.
As always, we will provide updates on any important company- specific news as soon as possible.
Regards, Larsen Kusick & the TSC Breakout Stocks Team
Send email to
-----------------------------------------------------------
Visit TheStreet.com Breakout Stocks site (available to subscribers ONLY) by clicking here: http://www.thestreet.com/k/bos/index.html
To view TheStreet.com Breakout Stocks portfolio on the Web, click here: http://www.thestreet.com/k/bos/portfolio.html
For customer service on your account please visit: https://secure2.thestreet.com/cap/selfserve/
-----------------------------------------------------------
Recent Actions
The compliance and security management vendor beat estimates and is well positioned for continued growth.
12/04/09 - 08:58 AM ESTPreviewing the numbers for this model portfolio name, which is widely expected to hit the high end of guidance.
12/02/09 - 08:00 AM ESTThe strength in the shares of this auction Web site has prompted us to book some gains.
12/01/09 - 01:28 PM ESTWeekly Roundups
We took some modest action in the model portfolio this week as the market recovered from last week's selloff.
12/04/09 - 05:37 PM ESTThe model portfolio saw the initiation of a new name in a holiday week that culminated with shocking news from Dubai.
11/27/09 - 02:45 PM ESTPlease note that any trading ideas suggested in the Product prior to June 9, 2009 were recommended by Mr. Larsen Kusick.
TheStreet.com Breakout Stocks contains the author's own opinions, and none of the information contained therein constitutes a recommendation that any particular security, portfolio of securities, transaction, or investment strategy is suitable for any specific person. You further understand that Mr. Ashenberg will not advise you personally concerning the nature, potential, value or suitability of any particular security, portfolio of securities, transaction, investment strategy or other matter. To the extent any of the information contained in TheStreet.com Breakout Stocks may be deemed to be investment advice, such information is impersonal and not tailored to the investment needs of any specific person.
Investing in the stocks chosen for TheStreet.com Breakout Stocks model portfolio is risky and speculative. The companies may have limited operating histories and little available public information, and the stocks they issue may be volatile and illiquid. Trading in such securities can result in immediate and substantial losses of the capital invested. You should use only risk capital, and not capital required for other purposes, such as retirement savings, student loans, mortgages or education.
TheStreet.com Breakout Stocks portfolio is a model portfolio of stocks chosen by the author in accordance with his stated investment strategy. Your actual results may differ from results reported for the model portfolio for many reasons, including, without limitation: (i) performance results for the model portfolio do not reflect actual trading commissions that you may incur; (ii) performance results for the model portfolio do not account for the impact, if any, of certain market factors, such as lack of liquidity, that may affect your results; (iii) the stocks chosen for the model portfolio may be volatile, and although the "purchase" or "sale" of a security in the model portfolio will not be effected in the model portfolio until confirmation that the email alert has been sent to all subscribers, delivery delays and other factors may cause the price you obtain to differ substantially from the price at the time the alert was sent; and (iv) the prices of stocks in the model portfolio at the point in time you begin subscribing to TheStreet.com Breakout Stocks may be higher than such prices at the time such stocks were chosen for inclusion in the model portfolio. Past results are not necessarily indicative of future performance. TheStreet.com Breakout Stocks portfolio is a model portfolio of stocks chosen by the authors in accordance with their stated investment strategy. Your actual results may differ from results reported for the model portfolio for many reasons, including, without limitation: (i) performance results for the model portfolio do not reflect actual trading commissions that you may incur; (ii) performance results for the model portfolio do not account for the impact, if any, of certain market factors, such as lack of liquidity, that may affect your results; (iii) the stocks chosen for the model portfolio may be volatile, and although the "purchase" or "sale" of a security in the model portfolio will not be effected in the model portfolio until confirmation that the email alert has been sent to all subscribers, delivery delays and other factors may cause the price you obtain to differ substantially from the price at the time the alert was sent; and (iv) the prices of stocks in the model portfolio at the point in time you begin subscribing to TheStreet.com Breakout Stocks may be higher than such prices at the time such stocks were chosen for inclusion in the model portfolio. Past results are not necessarily indicative of future performance.
| Dow Jones | S&P 500 | NASDAQ | 10-Year Note | |
|---|---|---|---|---|
| 10,388.90 | 1,105.98 | 2,194.35 | 34.83 |
Oil *
77.74
|
|
UP
22.75
|
UP
6.06
|
UP
21.21
|
UP
1.03
|
10 Yr
3.48%
SPDR Gold
113.75
|
|
+0.22%
|
+0.55%
|
+0.98%
|
+3.05%
|
Data delayed 20 minutes |
More From TheStreet
Latest Headlines
Brokerage Partners
Connect with TheStreet