Eagle Capital Management, an investment management company, released its first quarter 2026 investor letter. A copy of the letter is available to download here. The letter notes that individual stocks and subsectors are now more reactive to sentiments, reducing market efficiency but creating opportunities to add value. Over the last decade, multi-asset managers, or pods, have grown significantly, operating with leverage, tight risk controls, and quickly cutting losers, often relying on earnings momentum. Growth managers have outperformed value managers, attracting flows; retail investors increasingly chase momentum, reducing overall diversity and amplifying momentum’s influence. It’s more valuable to find controversial or underexplored assets early and benefit as earnings grow. Eagle has capitalized on this trend, expecting continued opportunities. Investments should consider probabilities, building portfolios for various outcomes rather than betting on one, which allows for compound growth. The Strategy is generating strong long-term absolute returns. Please review the Strategy’s top five holdings to gain insights into their key selections for 2026.
In its first-quarter 2026 investor letter, Eagle Capital Management highlighted stocks like MercadoLibre, Inc. (NASDAQ:MELI). MercadoLibre, Inc. (NASDAQ:MELI) is a leading online commerce platform in Latin America that operates Mercado Libre Marketplace and Mercado Pago FinTech platforms. On May 20, 2026, MercadoLibre, Inc. (NASDAQ:MELI) closed at $1,651.20 per share. One-month return of MercadoLibre, Inc. (NASDAQ:MELI) was -8.73%, and its shares lost 36.64% over the past 52 weeks. MercadoLibre, Inc. (NASDAQ:MELI) has a market capitalization of $83.71 billion.
Eagle Capital Management stated the following regarding MercadoLibre, Inc. (NASDAQ:MELI) in its Q1 2026 investor letter:
“MercadoLibre, Inc. (NASDAQ:MELI) is the leading e-commerce platform in Latin America, with a complementary fintech business. The company has a dominant share in most of its markets. It has used this position to build an integrated flywheel with payment and banking products that allow it to further monetize its platform and better engage with consumers and sellers. Latin America has relatively low e-commerce penetration —we estimate it at the mid-teens, compared with nearly 30% in the U.S. — enabling a longer runway for extraordinary growth.
The company is investing heavily to capture this opportunity. Last year, revenue growth accelerated to 39%, while margins declined. We expect further declines this year. We believe current earnings would be more than 50% higher without these investments. But foregoing this spending would be a mistake. In some ways, the company reminds us of Amazon a decade ago. As with Amazon, management operates the business well, doesn’t manage for short-term earnings, and has a superb track record of creating long-term value. We expect EPS growth to exceed 30% over the coming years.”
MercadoLibre, Inc. (NASDAQ:MELI) is in 37th position on our list of 40 Most Popular Stocks Among Hedge Funds Heading Into 2026. According to our database, 113 hedge fund portfolios held MercadoLibre, Inc. (NASDAQ:MELI) at the end of the fourth quarter, up from 109 in the previous quarter. While we acknowledge the risk and potential of MercadoLibre, Inc. (NASDAQ:MELI) as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than MercadoLibre, Inc. (NASDAQ:MELI) and that has 10,000% upside potential, check out our report about this cheapest AI stock.
In another article, we covered MercadoLibre, Inc. (NASDAQ:MELI) and shared the list of stocks with the best earnings growth for the next 10 years. In addition, please check out our hedge fund investor letters Q1 2026 page for more investor letters from hedge funds and other leading investors.
READ NEXT: 33 Stocks That Should Double in 3 Years and 15 Stocks That Will Make You Rich in 10 Years.
Disclosure: None. This article is originally published at Insider Monkey.
