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Mercadolibre Inc. (MELI): Today's Featured Diversified Services Laggard

Editor's Note: TheStreet ratings do not represent the views of TheStreet's staff or its contributors. Ratings are established by computer based on metrics for performance (which includes growth, stock performance, efficiency and valuation) and risk (volatility and solvency). Companies with poor cash flow or high debt levels tend to earn lower ratings in our model.

Mercadolibre ( MELI) pushed the Diversified Services industry lower today making it today's featured Diversified Services laggard. The industry as a whole was unchanged today. By the end of trading, Mercadolibre fell $2.36 (-3.1%) to $73.09 on heavy volume. Throughout the day, 1.6 million shares of Mercadolibre exchanged hands as compared to its average daily volume of 602,700 shares. The stock ranged in price between $72.59-$75.61 after having opened the day at $75.01 as compared to the previous trading day's close of $75.45. Other companies within the Diversified Services industry that declined today were: Innovaro ( INV), down 30.8%, CIBT Education Group ( MBA), down 21.6%, Rainmaker Systems ( RMKR), down 13%, and eLong ( LONG), down 7.9%.

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MercadoLibre, Inc. hosts online commerce platforms in Latin America. Its services are designed to provide its users with mechanisms for buying, selling, paying, collecting, generating leads, and comparing listings via e-commerce transactions. Mercadolibre has a market cap of $3.23 billion and is part of the services sector. The company has a P/E ratio of 34.8, above the S&P 500 P/E ratio of 17.7. Shares are down 8.1% year to date as of the close of trading on Wednesday. Currently there are four analysts that rate Mercadolibre a buy, one analyst rates it a sell, and two rate it a hold.

TheStreet Ratings rates Mercadolibre as a buy. The company's strengths can be seen in multiple areas, such as its robust revenue growth, largely solid financial position with reasonable debt levels by most measures, expanding profit margins and notable return on equity. We feel these strengths outweigh the fact that the company shows weak operating cash flow.

On the positive front, Net one Ueps Technologies ( UEPS), up 22.5%, SmartPros ( SPRO), up 14.8%, SuperMedia ( SPMD), up 14%, and AthenaHealth ( ATHN), up 9.8%, were all gainers within the diversified services industry with Hertz Global Holdings ( HTZ) being today's featured diversified services industry leader.

For investors not wanting singular stock exposure, ETFs may be of interest. Investors who are bullish on the diversified services industry could consider iShares Dow Jones US Cons Services ( IYC) while those bearish on the diversified services industry could consider ProShares Ultra Short Consumer Sers ( SCC).

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