Equity analysts in Manhattan have a difficult time imagining the logistics needs in Brazil.
In this podcast, Motley Fool analyst Bill Mann and host Ricky Mulvey discuss:
- Earnings from MercadoLibre and Celsius.
- The difficult market for energy drink makers.
- Schwab opening up 24-hour trading for stocks.
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To catch full episodes of all The Motley Fool’s free podcasts, check out our podcast center. To get started investing, check out our beginner’s guide to investing in stocks. A full transcript follows the video.
Ricky Mulvey: How about a little bit of trading all of the time? You’re listening to Motley Fool Money. I’m Ricky Mulvey, joined today by Bill Mann. Bill, it’s good to see you today.
Bill Mann: Hey, Ricky. How are you doing, man?
Ricky Mulvey: I’m doing all right. We’re recording this quick note for listeners. This is before the Federal Reserve has announced what they are doing about interest rates. In fact, we’re recording it one hour before. I know this is something you’re going to be following very closely in deciding what to do with all of your stocks once Jerome Powell says something, but I just wanted to let listeners know we’re going to dive into some company earnings.
First up, we’ve got two growth stocks that have hit a little bit of a snag. Let’s start with a full favorite, and that’s Mercado Libre, the online marketplace in payments company. First part sounds really good, Bill. Revenue, up 35% year-on-year. It’s already the largest company in Latin America, I believe. Almost seven million new buyers came onto the platform, say, two times, CEO Marcos Eduardo Galperin, “This is a number higher than the number we saw during the peak of the pandemic. Let me be clear on that. Not even during the explosion of demand that we experienced in the pandemic, we saw a number of new users at this level.” Bill, let’s focus on the positive first. What’s driving the business growth for Mercado Libre?
Bill Mann: Ricky, Mercado Libre actually told us about a lot of this a month ago, and they reported that the consumer spending in Argentina has begun a really substantial rebound with consumers spending about $916 million in the month. There’s a lot of momentum in non-essential goods like computers and cellphones. They’ve been talking about the growth rates for a while. You’re right. Mercado Libre, I guess, until today, was Latin America’s most valuable company. Probably, as we go to press, they’re down 15%, so they may not be by the end of today, but they’ve managed to do this despite really long-term weakness in one of the most key markets that they have. You can imagine what they might be able to do with a tailwind. It’s all good news on the top line from Mercado Libre.
Ricky Mulvey: Let’s talk about the traders some investors are a little upset about. That is the growth of its credit book, and that was by 77%. We talked about the online marketplace where you can buy a lot of those Amazon related items. Also, cars, which you can’t get on Amazon. I think that’s interesting. You can get a car on Mercado Libre. Anyway, I should bring it back to the credit book of Mercado Libre. The number of credit cards, loans, that grew by 172%, for those keeping notes at home, almost 200%. We’ll leave it there, a lot of growth in credit cards. This impacts the company’s bottom line. Before we get to the reaction, first, the fundamental question, how is this credit card issuance, how does that affect a company’s earnings and net income?
