MERCADOLIBRE INC (NASDAQ:MELI) – A Strong Contender for CANSLIM Investors

MERCADOLIBRE INC (NASDAQ:MELI) stands out as a compelling candidate for investors following the CANSLIM strategy. The company’s strong earnings growth, high relative strength, and solid fundamentals align well with the criteria outlined by William O’Neil’s methodology. Below, we examine why MELI fits the CANSLIM framework.

Key CANSLIM Criteria and How MELI Measures Up

• Current Earnings Growth (C): MELI reported a 43.7% year-over-year increase in quarterly EPS, well above the 20% minimum threshold recommended by CANSLIM. Revenue growth also remains strong at 37% for the same period.
• Annual Earnings Growth (A): The company’s three-year EPS growth stands at an impressive 172.7%, far exceeding the 25% benchmark. Return on equity (ROE) is equally strong at 41.2%, indicating efficient capital use.
• New Highs & Leadership (N & L): MELI has a relative strength score of 90.9, meaning it outperforms nearly 91% of the market—a hallmark of a leading stock. While recent price action has been volatile, the long-term uptrend remains intact.
• Supply & Demand (S): Institutional ownership sits at 83.7%, below the 85% threshold, suggesting room for further institutional accumulation. The debt-to-equity ratio of 0.57 is manageable and below our screener’s limit of 2.
• Market Direction (M): The S&P 500’s long-term trend remains positive, supporting a favorable environment for growth stocks like MELI.

Technical and Fundamental Snapshot

• Fundamentals: MELI earns a solid 7/10 rating, with high marks for profitability (9/10) and growth (9/10). Valuation remains elevated, but strong future earnings growth could justify the premium.
• Technicals: The stock scores 7/10, with a strong long-term uptrend but recent weakness in the short term. Key support levels exist near $2,368 and $1,938, while resistance is seen around $2,585.

For a deeper dive, review the full fundamental analysis and technical report.

Our CANSLIM High Growth screener lists more stocks meeting these criteria and is updated daily.

Disclaimer

This is not investment advice. Always conduct your own research before making financial decisions.