Should You Avoid Mercadolibre Inc (MELI)?: E Commerce China Dangdang Inc (ADR) (DANG), Stamps.com Inc. (STMP)

Page 1 of 2

Is Mercadolibre Inc (NASDAQ:MELI) an attractive stock to buy now? Investors who are in the know are reducing their bets on the stock. The number of long hedge fund positions fell by 4 lately.

According to most stock holders, hedge funds are seen as underperforming, outdated investment tools of the past. While there are greater than 8000 funds trading today, we choose to focus on the aristocrats of this club, about 450 funds. It is widely believed that this group oversees the lion’s share of all hedge funds’ total capital, and by paying attention to their highest performing picks, we have uncovered a number of investment strategies that have historically outperformed the broader indices. Our small-cap hedge fund strategy outpaced the S&P 500 index by 18 percentage points annually for a decade in our back tests, and since we’ve started sharing our picks with our subscribers at the end of August 2012, we have topped the S&P 500 index by 24 percentage points in 7 months (check out a sample of our picks).

Equally as key, positive insider trading sentiment is a second way to break down the financial markets. There are a variety of incentives for a corporate insider to sell shares of his or her company, but only one, very obvious reason why they would behave bullishly. Several empirical studies have demonstrated the useful potential of this tactic if you understand where to look (learn more here).

With all of this in mind, it’s important to take a glance at the latest action surrounding Mercadolibre Inc (NASDAQ:MELI).

How are hedge funds trading Mercadolibre Inc (NASDAQ:MELI)?

In preparation for this year, a total of 9 of the hedge funds we track were long in this stock, a change of -31% from one quarter earlier. With the smart money’s positions undergoing their usual ebb and flow, there exists a select group of noteworthy hedge fund managers who were boosting their holdings substantially.

According to our comprehensive database, Ken Griffin’s Citadel Investment Group had the largest position in Mercadolibre Inc (NASDAQ:MELI), worth close to $15 million, comprising 0% of its total 13F portfolio. Sitting at the No. 2 spot is Driehaus Capital, managed by Richard Driehaus, which held a $7 million position; the fund has 0.3% of its 13F portfolio invested in the stock. Other hedge funds that are bullish include David Blood and Al Gore’s Generation Investment Management, and John Burbank’s Passport Capital.

Due to the fact that Mercadolibre Inc (NASDAQ:MELI) has faced falling interest from the smart money, it’s easy to see that there lies a certain “tier” of hedge funds who sold off their entire stakes last quarter. It’s worth mentioning that Jim Simons’s Renaissance Technologies dumped the biggest position of all the hedgies we watch, comprising close to $25 million in stock., and Christopher Lord of Criterion Capital was right behind this move, as the fund dropped about $9 million worth. These transactions are interesting, as total hedge fund interest was cut by 4 funds last quarter.

What do corporate executives and insiders think about Mercadolibre Inc (NASDAQ:MELI)?

Insider purchases made by high-level executives is most useful when the company in focus has experienced transactions within the past half-year. Over the latest six-month time period, Mercadolibre Inc (NASDAQ:MELI) has seen zero unique insiders buying, and 1 insider sales (see the details of insider trades here).

Let’s go over hedge fund and insider activity in other stocks similar to Mercadolibre Inc (NASDAQ:MELI). These stocks are E Commerce China Dangdang Inc (ADR) (NYSE:DANG), Stamps.com Inc. (NASDAQ:STMP), PC Connection, Inc. (NASDAQ:PCCC), Liquidity Services, Inc. (NASDAQ:LQDT), and Liberty Interactive (Interactive group) (NASDAQ:LINTA). This group of stocks are in the catalog & mail order houses industry and their market caps resemble MELI’s market cap.

Page 1 of 2
Comments
Insider Monkey Small Cap Strategy
Insider Monkey Small Cap Strategy

Insider Monkey beat the market by 52 percentage points in 24 months. Our beta is only 1.2 (don't click this link if beating the market isn't important to you).

Lists

Foods That Stain Your Teeth

Richest Doctors in the World

The Best Movie Sountracks Ever

The Highest Grossing Musicals on Broadway

The Most Successful Reality TV Stars

Cheapest Cities to Visit in the US

Most Expensive Summer Camps

Most Expensive Animals in the World

Most Expensive Specialty Crops in the World

Movies That Took Ages to Make

The Longest Hollywood Films Ever Made

Most Expensive Concert Stages

The Richest Bands of all Time

10 Most Corrupt Countries 2013 List

10 Countries with the Highest Quality of Life Index

Most Expensive Mattresses in the World

5 Smallest Countries by Land Area

The Ultimate Heartbreak Songs

Richest Teenagers in the World

10 Most Haunted Places in America

10 Best Places to Retire in Florida East Coast

Top 10 Places to See Before You Die

Top 8 Countries in the World Where Justice Prevails

10 Richest States in America

15 Wealthiest Countries in the World

Richest Singers in the World

Most Expensive Tasting Menu in New York City

Most Expensive Baby Items in the World

Most Expensive Hotel Suites in Vegas

Most Expensive Brunch in New York City

Most Expensive Beef Cuts in the World

25 Best Colleges to Get a Job

Top 10 US Supermarkets

The 25 Most Dangerous Cities in the World to Visit

Most Expensive Xbox Games

Top 11 Cities Where Billionaires Live

Top 10 Most Charitable Companies in America

Most Expensive Seafood in the World

The 10 Wildest Conspiracy Theories

The 10 Best Job Markets in the US

Top 10 Accounting Scandals of All Time

The 25 Biggest Cities in the World

Top 10 Best Paying Virtual Jobs

Most Expensive Leather Shoes in the World

Top 6 Things to Buy in March

The 10 Most Stressful Jobs in America – 2014 List

Top 10 Jobs for Introverted People

Top 10 Honeymoon Destinations in the World

Top 10 Highest Paying Jobs in the World

Most Expensive Day-Care in New York City

Subscribe

Enter your email:

Delivered by FeedBurner

X

Thanks! An email with instructions is sent to !

Your email already exists in our database. Click here to go to your subscriptions

Insider Monkey returned 47.6% in its first year! Wondering How?

Download a complete edition of our newsletter for free!