Trade-Ideas: Mercadolibre (MELI) Is Today's New Lifetime High Stock

Editor's Note: Any reference to TheStreet Ratings and its underlying recommendation does not reflect the opinion of TheStreet, Inc. or any of its contributors including Jim Cramer.

Trade-Ideas LLC identified Mercadolibre ( MELI) as a new lifetime high candidate. In addition to specific proprietary factors, Trade-Ideas identified Mercadolibre as such a stock due to the following factors:

  • MELI has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $59.9 million.
  • MELI has traded 2,144 shares today.
  • MELI is trading at a new lifetime high.

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More details on MELI:

MercadoLibre, Inc. hosts online commerce platforms in Latin America. It offers MercadoLibre Marketplace, an automated online e-commerce service for businesses and individuals to list items and conduct their sales and purchases online in a fixed-price or auction-based format. The stock currently has a dividend yield of 0.3%. MELI has a PE ratio of 87.7. Currently there are 4 analysts that rate Mercadolibre a buy, 1 analyst rates it a sell, and 1 rates it a hold.

The average volume for Mercadolibre has been 453,700 shares per day over the past 30 days. Mercadolibre has a market cap of $6.3 billion and is part of the services sector and retail industry. The stock has a beta of 2.46 and a short float of 20.1% with 12.59 days to cover. Shares are up 12% year-to-date as of the close of trading on Thursday.

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TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates Mercadolibre as a buy. The company's strengths can be seen in multiple areas, such as its robust revenue growth, good cash flow from operations, largely solid financial position with reasonable debt levels by most measures, solid stock price performance and expanding profit margins. We feel these strengths outweigh the fact that the company has had sub par growth in net income.

Highlights from the ratings report include:
  • The revenue growth came in higher than the industry average of 5.8%. Since the same quarter one year prior, revenues rose by 19.9%. This growth in revenue does not appear to have trickled down to the company's bottom line, displayed by a decline in earnings per share.
  • Net operating cash flow has significantly increased by 196.74% to $58.35 million when compared to the same quarter last year. In addition, MERCADOLIBRE INC has also vastly surpassed the industry average cash flow growth rate of 43.24%.
  • Compared to its closing price of one year ago, MELI's share price has jumped by 52.59%, exceeding the performance of the broader market during that same time frame. We feel that the stock's sharp appreciation over the last year has driven it to a price level which is now somewhat expensive compared to the rest of its industry. The other strengths this company shows, however, justify the higher price levels.
  • MELI's debt-to-equity ratio of 0.80 is somewhat low overall, but it is high when compared to the industry average, implying that the management of the debt levels should be evaluated further. Despite the fact that MELI's debt-to-equity ratio is mixed in its results, the company's quick ratio of 1.76 is high and demonstrates strong liquidity.
  • The gross profit margin for MERCADOLIBRE INC is currently very high, coming in at 73.31%. Regardless of MELI's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, MELI's net profit margin of 21.16% compares favorably to the industry average.

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