- Investment Manager Doubles Down on MercadoLibre With $51 Million Purchase
Jan 21, 2026
Key Points
Increased MercadoLibre stake by 36,862 shares Quarter-end position value rose by $51.45 million, reflecting both trading activity and share price movement Post-trade holding: 116,848 shares, valued at $238.37 million at quarter-end MercadoLibre now accounts for 27.5% of Northcape's 13F AUM, making it the fund's largest holding These 10 stocks could mint the next wave of millionaires ›
Northcape Capital Ltd disclosed a buy of 36,862 additional MercadoLibre(NASDAQ:MELI) shares in its latest SEC filing dated January 20, 2026.
What Happened
According to a January 20, 2026, SEC filing, Northcape Capital Ltd increased its position in MercadoLibre by 36,862 shares during the fourth quarter. The overall value of the position climbed by $51.45 million, a change driven by both trading activity and share price appreciation.
What Else to Know
MercadoLibre now represents 27.5% of Northcape's 13F reportable AUM.
Top holdings after the filing:
NASDAQ:MELI: $238.37 million (27.5% of AUM) NYSE:AMOV: $220.22 million (25.4% of AUM) NYSE:HDB: $184.19 million (21.2% of AUM) NYSE:ITUB: $96.14 million (11.1% of AUM) NYSE:PAC: $51.59 million (6.0% of AUM)
As of January 20, 2026, MercadoLibre shares were priced at $2,034.82, up 10.9% over the past year; shares have underperformed the S&P 500 by 2.52 percentage points.
Company Overview
Metric Value Revenue (TTM) $26.19 billion Net Income (TTM) $2.08 billion Price (as of market close 2026-01-20) $2,034.82 One-Year Price Change 10.92%
Company Snapshot
Offers an online marketplace, digital payments (Mercado Pago), logistics (Mercado Envios), consumer and merchant credit, investment products, advertising, and classified listings across Latin America. Generates revenue primarily through transaction fees, payment processing, credit products, logistics services, and advertising on its digital platforms. Serves businesses, merchants, and individual consumers, with a focus on Latin American markets.
MercadoLibre, Inc. is the leading e-commerce and fintech platform in Latin America, leveraging a broad ecosystem that integrates online retail, payments, logistics, and credit services. The company’s scale, technology infrastructure, and network effects provide a significant competitive advantage in high-growth, underpenetrated markets. MercadoLibre’s diversified business model enables it to capture multiple revenue streams and adapt to evolving digital commerce trends in the region.
What This Transaction Means For Investors
The recent purchase by Northcape Capital, an Australian investment manager, of MercadoLibre stock could be significant. Here’s what retail investors need to know.
Story Continues
First off, Northcape’s acquisition of MercadoLibre during the fourth quarter (the three months ending on Dec. 31, 2025) was quite large. Northcape added about 37,000 shares of MercadoLibre, bringing its total holdings of the stock to nearly 117,000 shares, valued at approximately $238 million. MercadoLibre is now Northcape’s largest overall holding, representing 27.5% of its total AUM.
As for MercadoLibre itself, the stock cooled off in the second half of 2025, after a sharp move higher at the start of the year. Nevertheless, over the last three years, MercadoLibre stock has performed well, logging a total return of 85%, equating to a compound annual growth rate (CAGR) of 22.8%. That’s ahead of the S&P 500, which has generated a CAGR of 21.3% over the same period.
At any rate, macroeconomic headwinds and intensifying competition have started to weigh on MercadoLibre in recent months. However, for investors eyeing the Latin American e-commerce market, MercadoLibre is still worth considering, given its consistent growth and solid profitability.
Don’t miss this second chance at a potentially lucrative opportunity
Ever feel like you missed the boat in buying the most successful stocks? Then you’ll want to hear this.
On rare occasions, our expert team of analysts issues a “Double Down” stock recommendation for companies that they think are about to pop. If you’re worried you’ve already missed your chance to invest, now is the best time to buy before it’s too late. And the numbers speak for themselves:
Nvidia:if you invested $1,000 when we doubled down in 2009,you’d have $461,865!* Apple: if you invested $1,000 when we doubled down in 2008, you’d have $46,932!* Netflix: if you invested $1,000 when we doubled down in 2004, you’d have $470,587!*
Right now, we’re issuing “Double Down” alerts for three incredible companies, available when you joinStock Advisor, and there may not be another chance like this anytime soon.
See the 3 stocks »
*Stock Advisor returns as of January 20, 2026
Jake Lerch has positions in MercadoLibre. The Motley Fool has positions in and recommends MercadoLibre. The Motley Fool recommends Grupo Aeroportuario Del PacíficoB. De C.v. and HDFC Bank. The Motley Fool has a disclosure policy.
Investment Manager Doubles Down on MercadoLibre With $51 Million Purchase was originally published by The Motley Fool
View Comments
- 3 Tech Stocks to Buy for Exposure to Emerging Markets
Mar 24, 2023
Even after the recent mini-banking crisis, investments in emerging markets are poised to “perform pretty strongly in the years ahead,” TD Securities analyst Mitul Kotecha told CNBC on March 20. “Even this year once we get through this shock, our assumption is that the dollar will continue to weaken,” the analyst stated, boosting emerging market currencies and helping investments in those nations. Kotecha named Brazil and Mexico two of the best-emerging countries to invest in. Morgan Stanley and BlackRock have recently shared Kotecha’s optimism on emerging markets. This column will identify three tech stocks to buy in emerging markets.
So far in 2023, the Street has been quite enamored with tech stocks. So with heavyweight analysts calling for investors to plow funds into emerging markets and the Street embracing tech, now is a great time to buy tech stocks in emerging markets.
Here are three great choices within that category.
InvestorPlace - Stock Market News, Stock Advice & Trading Tips
Tech Stocks to Buy: America Movil (AMX) Image of a well-lit data center
Source: Shutterstock
As part of America’s large onshoring trend, many U.S.-based companies are building or preparing to build factories in Mexico. For example, Elon Musk’s Tesla (NASDAQ:TSLA) recently announced that it would build a large factory in northern Mexico. Indeed, according to the New York Times, “During the first 10 months of last year, Mexico exported $382 billion of goods to the United States, an increase of more than 20 percent over the same period in 2021,”
The Mexican economy should get a big boost from the trend, lifting telecom company America Movil, which operates in 24 nations in Latin America but focuses primarily on Mexico and Brazil. AMX obtains 35% of its EBITDA from Mexico. The company says that it is the leading telecom company in terms of market share in both Mexico and Brazil.
In addition to traditional telecom services, America Movil operates dozens of data centers that it utilizes “to manage a number of cloud solutions.” The company says that, within Mexico, it has 81.36 million “wireless subscribers.”
Story continues
In addition to getting a lift from the improving Mexican economy, AMX’s top and bottom lines are likely to be meaningfully raised by increased utilization of 5G technology in the coming years.
Trading at just 8.5 times analysts’ average 2024 earnings per share estimate, AMX stock’s valuation is very attractive.
MercadoLibre (MELI) mercado libre box
Source: tiagogarciafoto / Shutterstock.com
The growth of Latin American e-commerce company MercadoLibre (NASDAQ:MELI) is truly extremely impressive.
Last quarter, for example, MELI’s gross merchandise volume jumped 35% year-over-year, excluding currency fluctuations. Not surprisingly, the company cited Mexico and Brazil, where its currency-neutral GMV climbed 22% and 28%, respectively, as the key to its Q4 growth. Increasing its active user base 27% YOY in Q4 to almost 44 million, MELI’s fintech business is also rapidly expanding.
Last quarter, MercadoLibre’s overall sales soared 56.5% YOY, excluding currency changes, and the revenue of its fintech unit soared an incredible 93% YOY on a currency-neutral basis to more than $1.3 billion.
Unlike many e-commerce companies, MELI is very profitable, as its operating income jumped to $1.03 billion last year from $441 million in 2021. Meanwhile, its 2022 top line was $10.54 billion versus $7.07 billion in 2021.
In a note to investors on March 3, British bank Barclaysraised its price target on MELI stock to $1,475 from $1,250. The firm expects MELI to continue to gain market share in Brazil, and it maintained an “overweight” rating on the shares.
Xpeng (XPEV) Xpeng (XPEV) car dealership at night with white company logo on display above EVs
Source: shutterstock.com/Robert Way
In line with my previous predictions, Xpeng (NYSE:XPEV), a China-based electric-vehicle maker, is becoming a leader in driving-assistance technology.
During the company’s fourth-quarter earnings call on March 17, its CEO, He Xiaopeng, reported that its driving assistance system, XNGP, “outperformed peers’ actual on-road performance in the United States.”
In other words, XNGP, powered by advanced AI technology, is superior to any offering available in the U.S. The system will be rolled out in more than ten Chinese cities in the second half of this year.
Moreover, Xpev believes that, by mid-2026, XNGP will be able to operate vehicles on a level similar to that of “a human driver with three years of driving experience.” The firm added that, at that point, human drivers utilizing the system will only have to take any actions an average of once every 100 kilometers.
However, the Street, which tends to have a largely short-term term viewpoint, was probably more excited by Xpeng’s announcement during the call that its orders had surged 100% in February compared with January.
“Our new order intake in February increased 100% over the previous month. With the strong momentum of P7i orders, following its official launch, we expect to see a considerable month-on-month growth of total new order intake in March,” He, the company’s CEO, stated.
While Xpeng appeared to attribute the surge to its introduction of a new “sports sedan,” I believe the coming launch of XNGP also likely played a role in the huge order surge.
As of the date of publication, Larry Ramer owned shares of XPEV. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
Larry Ramer has conducted research and written articles on U.S. stocks for 15 years. He has been employed by The Fly and Israel’s largest business newspaper, Globes. Larry began writing columns for InvestorPlace in 2015. Among his highly successful, contrarian picks have been PLUG, XOM and solar stocks. You can reach him on Stocktwits at @larryramer.
More From InvestorPlace
Buy This $5 Stock BEFORE This Apple Project Goes Live The Best $1 Investment You Can Make Today It doesn’t matter if you have $500 or $5 million. Do this now. Massive Bear Market “Divergence Event” Ahead… And The #1 Way to Play It
The post 3 Tech Stocks to Buy for Exposure to Emerging Markets appeared first on InvestorPlace.
- The Zacks Analyst Blog Highlights TotalEnergies, America Movil, Palo Alto Networks, Manulife Financial and Laboratory Corporation of America
Mar 7, 2023
For Immediate Release
Chicago, IL – March 7, 2023 – Zacks.com announces the list of stocks featured in the Analyst Blog. Every day the Zacks Equity Research analysts discuss the latest news and events impacting stocks and the financial markets. Stocks recently featured in the blog include: TotalEnergies SE TTE, América Móvil, S.A.B. de C.V. AMX, Palo Alto Networks, Inc. PANW, Manulife Financial Corp. MFC and Laboratory Corporation of America Holdings LH.
Here are highlights from Monday’s Analyst Blog:
Top Stock Reports for TotalEnergies, America Movil and Palo Alto Networks
The Zacks Research Daily presents the best research output of our analyst team. Today's Research Daily features new research reports on 16 major stocks, including TotalEnergies SE, América Móvil, S.A.B. de C.V. and Palo Alto Networks, Inc. These research reports have been hand-picked from the roughly 70 reports published by our analyst team today.
You can see all of today’s research reports here >>>
TotalEnergies shares have modestly outperformed the Zacks Oil and Gas - Refining and Marketing industry over the past year (+28.6% vs. +25.7%). The company continues to gain from startups, well-spread LNG assets and an expanding upstream portfolio that has exposure to fast-growing hydrocarbon-producing regions.
TotalEnergies streamlines its portfolio through acquisitions, partnerships, and divestitures. It is making regular investments to expand the renewable operation and aims to achieve net-zero emissions by 2050.
However, company’s production is impacted by the natural decline of oil and natural gas fields. TotalEnergies remains exposed to acquisition-related risks as these assets contribute a sizable volume to production. It operates in some politically troubled regions, and the ongoing conflict between Russia and Ukraine might affect profitability.
(You can read the full research report on TotalEnergies here >>>)
Shares of América Móvil have outperformed the Zacks Wireless Non-US industry over the past year (+16.3% vs. -2.8%). The company’s performance is gaining from increasing broadband client base and wireless subscriber additions, especially in Brazil, Austria and Colombia. Focused 5G efforts and the deployment of state-of-the-art technologies are tailwinds.
América Móvil’s efforts to increase shareholder value, lower debt and comprehensive financing costs by selling off cellular towers to Sitios Latinoamerica bode well. However, Q4 performance was affected due to the deconsolidation of Claro Chile coupled with unfavorable foreign currency movement and weakness in service and equipment revenues.
Also, fixed-line platform performance continues to suffer owing to lower Pay TV services and softness in corporate networks and broadband revenues. AT&T’s entry into the Mexican telecom industry and leveraged balance sheet are concerns.
(You can read the full research report on America Movil here >>>)
Palo Alto Networks shares have outperformed the Zacks Security industry over the past year (+7.8% vs. +3.0%). The company has been benefiting from continuous deal wins and increasing adoption of the company’s next-generation security platforms, attributable to the rise in remote work environment and need for stronger security.
Growing traction in Prisma and Cortex offerings are acting as a tailwind. Palo Alto continues to acquire new customers and increase wallet share with existing customers. According to the Zacks analyst estimate Palo Alto’s revenues will grow at a CAGR of 21.1% through fiscal 2023-2025.
Nonetheless, the company’s higher sales incentives related to Next-Generation Security products are likely to continue negatively impacting its bottom-line results. Forex headwinds and higher marketing and sales expenses are likely to continue hurting its profitability. Moreover, high acquisition related expenses are denting the margins.
(You can read the full research report on Palo Alto Networks here >>>)
Other noteworthy reports we are featuring today include Manulife Financial Corp. and Laboratory Corporation of America Holdings.
Story continues
Why Haven’t You Looked at Zacks' Top Stocks?
Since 2000, our top stock-picking strategies have blown away the S&P's +6.2 average gain per year. Amazingly, they soared with average gains of +46.4%, +49.5% and +55.2% per year. Today you can access their live picks without cost or obligation.
See Stocks Free >>
Media Contact
Zacks Investment Research
800-767-3771 ext. 9339
support@zacks.com
https://www.zacks.com
Past performance is no guarantee of future results. Inherent in any investment is the potential for loss. This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole. Zacks Investment Research does not engage in investment banking, market making or asset management activities of any securities. These returns are from hypothetical portfolios consisting of stocks with Zacks Rank = 1 that were rebalanced monthly with zero transaction costs. These are not the returns of actual portfolios of stocks. The S&P 500 is an unmanaged index. Visit https://www.zacks.com/performance for information about the performance numbers displayed in this press release.
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
Laboratory Corporation of America Holdings (LH) : Free Stock Analysis Report
America Movil, S.A.B. de C.V. (AMX) : Free Stock Analysis Report
Manulife Financial Corp (MFC) : Free Stock Analysis Report
Palo Alto Networks, Inc. (PANW) : Free Stock Analysis Report
TotalEnergies SE Sponsored ADR (TTE) : Free Stock Analysis Report
To read this article on Zacks.com click here.
Zacks Investment Research
- Top Stock Reports for TotalEnergies, America Movil & Palo Alto Networks
Mar 6, 2023
Monday, March 6, 2023
The Zacks Research Daily presents the best research output of our analyst team. Today's Research Daily features new research reports on 16 major stocks, including TotalEnergies SE (TTE), América Móvil, S.A.B. de C.V. (AMX) and Palo Alto Networks, Inc. (PANW). These research reports have been hand-picked from the roughly 70 reports published by our analyst team today.
You can see all of today’s research reports here >>>
TotalEnergies shares have modestly outperformed the Zacks Oil and Gas - Refining and Marketing industry over the past year (+28.6% vs. +25.7%). The company continues to gain from startups, well-spread LNG assets and an expanding upstream portfolio that has exposure to fast-growing hydrocarbon-producing regions.
TotalEnergies streamlines its portfolio through acquisitions, partnerships, and divestitures. It is making regular investments to expand the renewable operation and aims to achieve net-zero emissions by 2050.
However, company’s production is impacted by the natural decline of oil and natural gas fields. TotalEnergies remains exposed to acquisition-related risks as these assets contribute a sizable volume to production. It operates in some politically troubled regions, and the ongoing conflict between Russia and Ukraine might affect profitability.
(You can read the full research report on TotalEnergies here >>>)
Shares of América Móvil have outperformed the Zacks Wireless Non-US industry over the past year (+16.3% vs. -2.8%). The company’s performance is gaining from increasing broadband client base and wireless subscriber additions, especially in Brazil, Austria and Colombia. Focused 5G efforts and the deployment of state-of-the-art technologies are tailwinds.
América Móvil’s efforts to increase shareholder value, lower debt and comprehensive financing costs by selling off cellular towers to Sitios Latinoamerica bode well. However, Q4 performance was affected due to the deconsolidation of Claro Chile coupled with unfavorable foreign currency movement and weakness in service and equipment revenues.
Also, fixed-line platform performance continues to suffer owing to lower Pay TV services and softness in corporate networks and broadband revenues. AT&T’s entry into the Mexican telecom industry and leveraged balance sheet are concerns.
(You can read the full research report on America Movil here >>>)
Palo Alto Networks shares have outperformed the Zacks Security industry over the past year (+7.8% vs. +3.0%). The company has been benefiting from continuous deal wins and increasing adoption of the company’s next-generation security platforms, attributable to the rise in remote work environment and need for stronger security.
Growing traction in Prisma and Cortex offerings are acting as a tailwind. Palo Alto continues to acquire new customers and increase wallet share with existing customers. According to the Zacks analyst estimate Palo Alto’s revenues will grow at a CAGR of 21.1% through fiscal 2023-2025.
Nonetheless, the company’s higher sales incentives related to Next-Generation Security products are likely to continue negatively impacting its bottom-line results. Forex headwinds and higher marketing and sales expenses are likely to continue hurting its profitability. Moreover, high acquisition related expenses are denting the margins.
(You can read the full research report on Palo Alto Networks here >>>)
Other noteworthy reports we are featuring today include Old Dominion Freight Line (ODFL), Manulife Financial Corporation (MFC) and Laboratory Corporation of America Holdings (LH).
Director of Research
Sheraz Mian
Note: Sheraz Mian heads the Zacks Equity Research department and is a well-regarded expert of aggregate earnings. He is frequently quoted in the print and electronic media and publishes the weekly Earnings Trends and Earnings Preview reports. If you want an email notification each time Sheraz publishes a new article, please click here>>>
Story continues
Today's Must Read
Expanding LNG & Clean Energy Assets Aid TotalEnergies (TTE)
America Movil (AMX) Benefits from Increasing Subscriber Base
Palo Alto (PANW) Rides on Shift to Subscription Services
Featured Reports
Old Dominion (ODFL) Rides on Dividends & Buyback, Expenses Ail
The Zacks analyst likes the shareholder-friendly measures adopted by Old Dominion. However, rising operating expenses are concerning as they are likely to keep the bottom line under pressure.
Manulife Financial (MFC) to Grow on Solid Asia Business
Per the Zacks analyst, Manulife is set to grow on solid Asia and Wealth and Asset Management business and a strong capital position. Yet, high leverage and poor times interest earned concerns.
LabCorp (LH) Gains from Innovation, LaunchPad Efforts Aid
The Zacks analyst is impressed with LabCorp's continued spree of new product launches in high-growth areas. The LaunchPad cost-saving initiatives are helping the company to gain operationally.
United Therapeutics (UTHR) Dependence on PAH Drugs A Concern
United Therapeutics is a leader in treating pulmonary arterial hypertension (PAH) and markets four drugs. However, the company's overdependence on PAH concerns the Zacks Analyst.
Cousins Properties (CUZ) Rides on High-Quality Office Assets
Per the Zacks Analyst, Cousins Properties is well-poised to benefit from its portfolio of class A office properties in the high-growth Sun Belt markets. However, rising interest rates are a key woe.
New Upgrades
Rise in Digital Subscribers to Lift NY Times' (NYT) Revenues
Per the Zacks analyst, The New York Times Company benefits from increase in digital subscribers. Management anticipates digital-only subscription revenues to rise 13-16% in first-quarter 2023.
Murphy USA (MUSA) Gains from Proximity to Walmart Stores
The Zacks analyst likes the proximity of Murphy USA's fuel stations to Walmart supercenters and the consistent traffic that these stores attract, thereby driving above-average fuel sales volume.
New Downgrades
Low Demand & Cost Inflation Weigh on Stanley Black (SWK)
The Zacks analyst is concerned about weakness in the company's operations due to a low demand environment, and high raw material costs, thanks to rising inflation.
High Expenses, Leverage Concern Intercontinental Exchange (ICE)
Per the Zacks analyst, Intercontinental Exchange's increase in general, administrative, depreciation, amortization induces higher expenses that weigh on margin. Increased debt raises financial risk.
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
Laboratory Corporation of America Holdings (LH) : Free Stock Analysis Report
America Movil, S.A.B. de C.V. (AMX) : Free Stock Analysis Report
Manulife Financial Corp (MFC) : Free Stock Analysis Report
Old Dominion Freight Line, Inc. (ODFL) : Free Stock Analysis Report
Palo Alto Networks, Inc. (PANW) : Free Stock Analysis Report
TotalEnergies SE Sponsored ADR (TTE) : Free Stock Analysis Report
To read this article on Zacks.com click here.
Zacks Investment Research
- Zacks Industry Outlook Highlights America Movil, S.A.B. de C.V., Orange S.A. and PLDT
Feb 17, 2023
For Immediate Release
Chicago, IL – February 17, 2023 – Today, Zacks Equity Research discusses América Móvil, S.A.B. de C.V. AMX, Orange S.A. ORAN and PLDT Inc. PHI.
Industry: Wireless - Non-U.S.
Link: https://www.zacks.com/commentary/2055105/3-wireless-non-us-stocks-set-to-ride-on-5g-iot-proliferation
The Zacks Wireless Non-US industry appears poised to benefit from a gradual revival in post-pandemic market conditions and a faster pace of 5G deployment despite supply chain disruptions and chip shortages. However, large-scale investments for infrastructure upgrades to support the transition to 5G, high inflationary pressures and a challenging macroeconomic environment have eroded the sector's profitability.
Nevertheless, América Móvil, S.A.B. de C.V., Orange S.A. and PLDT Inc. might benefit in the long run from significant long-term growth opportunities and rising demand for scalable infrastructure for seamless connectivity with the wide proliferation of IoT.
Industry Description
The Zacks Wireless Non-US industry comprises mobile telecommunications and broadband service providers based on foreign shores. These companies primarily offer voice services, including local, domestic and international calls, roaming services and prepaid and postpaid. The firms provide value-added services, such as the IoT, comprising logistics and fleet management and automotive and health solutions.
They also offer content streaming, interactive applications, wireless security services and mobile payment solutions. Some industry players sell mobile handsets and accessories through dealer networks and offer co-billing services to other telecommunications service providers. The firms provide IT solutions, cable and satellite pay television subscriptions, as well as data services and hosting services to residential and corporate clients.
What's Shaping the Future of Wireless Non-US Industry
Holistic Growth Model: In addition to delivering mission-critical communication services, the companies are taking steps to accelerate subscriber additions and improve churn management. They aim to offer an exceptional wireless experience to consumers and business customers by providing superior network connectivity.
Story continues
The wireless carriers are expanding their footprint while adopting unlimited plans to enhance average revenue per user. They are progressing on strategic objectives, growing their customer base by increasing handset connections and customer loyalty to boost revenues and profitability.
Furthermore, the industry participants are taking a holistic approach to content delivery. They are offering various pathways for delivering services through a combination of network-based video transcoding and compression technologies to provide IP video formats, live TV and streaming services.
Focus on Network Upgrade: With the exponential growth of mobile broadband traffic and home Internet solutions owing to the increasing work-from-home trend, user demand for coverage speed and quality has increased manifold. This has resulted in a massive demand for advanced networking architecture, forcing service providers to upgrade their networks to support the surge in home data traffic.
Further, there is a continuous need for network tuning and optimization to maintain superior performance standards, creating demand for state-of-the-art wireless products and services. Moreover, telecom services show a weak correlation to macroeconomic factors as these are considered necessities. This, in turn, has led the carriers to focus more on network upgrades to cater to evolving customer needs.
The convergence of network technologies requires considerable investments from traditional carriers (telecom and cable) and cloud service providers. Although these investments will eventually help minimize service delivery costs to support broadband competition and wireless densification, short-term profitability has largely been compromised.
Profitability Woes Persist: Uncertainty regarding the chip shortage and supply-chain disruptions extending beyond semiconductors have crippled the manufacturing operations of most firms, leading to curtailed production schedules. This has led to a demand-supply imbalance, as the industry faces a dearth of essential fiber materials, shipping delays and shortages of containers and other raw materials, affecting the expansion and rollout of new broadband networks.
Extended lead times for basic components have negatively impacted the delivery schedules and escalated costs. Moreover, raw material prices have risen significantly owing to economic uncertainty driven by the Russia-Ukraine war, soft market conditions in China and coronavirus-led adversities, affecting the short-term profitability of most firms.
Wireless operators have been facing challenges due to the disruptive rise of over-the-top service providers in this dynamic industry. Price-sensitive competition for customer retention in the core business is expected to intensify in the coming days. Aggressive competition could limit their ability to attract and retain customers and affect operating and financial results.
Zacks Industry Rank Indicates Bullish Trends
The Zacks Wireless Non-US industry, which has 13 constituent companies, is housed within the broader Zacks Computer and Technology sector. It currently has a Zacks Industry Rank #21, which places it in the top 8% of more than 250 Zacks industries.
The group's Zacks Industry Rank, which is the average of the Zacks Rank of all the member stocks, indicates bright near-term prospects. Our research shows that the top 50% of the Zacks-ranked industries outperform the bottom 50% by a factor of more than 2 to 1.
Before we present a few non-US wireless stocks that you may want to consider for your portfolio, let's take a look at the industry's recent stock market performance and valuation picture.
Industry Outperforms Sector, Lags S&P 500
The Zacks Wireless Non-US industry has outperformed the broader Zacks Computer and Technology sector but lagged the S&P 500 composite in the past year.
The industry has lost 13.5% over this period compared with the S&P 500's and sector's decline of 9.2% and 17.8%, respectively.
Industry's Current Valuation
The Enterprise Value-to-EBITDA (EV/EBITDA) ratio is commonly used for valuing wireless stocks. The industry currently has a trailing 12-month EV/EBITDA of 5.12X compared with the S&P 500's 12.17X. It is also trading below the sector's trailing 12-month EV/EBITDA of 9.72X.
Over the past five years, the industry has traded as high as 22.54X, as low as 1.43X, with a median of 6.72X.
3 Non-US Wireless Stocks to Keep a Close Eye on
América Móvil: Based in Mexico City, America Movil is the leading provider of integrated telecommunications services in Latin America. It offers enhanced communications solutions in 25 countries in Latin America, the United States and Central and Eastern Europe. The company has launched a 5G network in Austria. America Movil has also launched 4.5G networks in Brazil, Mexico and Dominican Republic that can deliver speeds up to 10 times faster than 4G to allow subscribers to experience voice and video in high definition.
The Zacks Consensus Estimate for its current-year earnings has been revised 7.8% upward since July 2022. The stock has gained 8.8% in the past year and has a long-term earnings growth expectation of 8.5%. It has a VGM Score of B. America Movil currently carries a Zacks Rank #2 (Buy). You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here.
Orange: Headquartered in Paris, Orange is one of the world's leading telecommunications carriers with a presence in 26 countries. The company is also a leading provider of global IT and telecommunication services to multinational firms under the brand Orange Business Services. It has partnered with Move Capital to invest in the 'Move Capital I' venture capital fund that will empower Orange Business Services to become an integral stakeholder with a recognized panel of European technology companies.
The combined synergies created from this partnership will allow European tech companies to reinforce their competitiveness and fortify Orange's leadership in the region. The stock has a VGM Score of A. The Zacks Consensus Estimate for its current-year earnings has been revised 6.2% upward since October 2022. It carries a Zacks Rank #2.
PLDT Inc.: Headquartered in Makati City, the Philippines, PLDT is the leading telecommunications provider in the Southeast Asian country. It has a strategic partnership with Rocket Internet SE, a European Internet company, to develop online and mobile payment solutions. PLDT operates the country's most extensive international submarine cable network and has activated the US-Transpacific Jupiter cable system to strengthen its extensive fiber network.
The company is set to expand further with the completion of two more major international cable systems, namely Asia Direct Cable and the APRICOT cable system, set to be completed in the next two years. The consensus estimate for its current-year earnings has been revised 5.1% upward since September 2022. The stock has a long-term earnings growth expectation of 8.8%. PLDT sports a Zacks Rank #1.
Why Haven't You Looked at Zacks' Top Stocks?
Since 2000, our top stock-picking strategies have blown away the S&P's +6.2 average gain per year. Amazingly, they soared with average gains of +46.4%, +49.5% and +55.2% per year. Today you can access their live picks without cost or obligation.
See Stocks Free >>
Join us on Facebook: https://www.facebook.com/ZacksInvestmentResearch/
Zacks Investment Research is under common control with affiliated entities (including a broker-dealer and an investment adviser), which may engage in transactions involving the foregoing securities for the clients of such affiliates.
Media Contact
Zacks Investment Research
800-767-3771 ext. 9339
support@zacks.com
https://www.zacks.com
Past performance is no guarantee of future results. Inherent in any investment is the potential for loss. This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole. Zacks Investment Research does not engage in investment banking, market making or asset management activities of any securities. These returns are from hypothetical portfolios consisting of stocks with Zacks Rank = 1 that were rebalanced monthly with zero transaction costs. These are not the returns of actual portfolios of stocks. The S&P 500 is an unmanaged index. Visit https://www.zacks.com/performance for information about the performance numbers displayed in this press release.
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
America Movil, S.A.B. de C.V. (AMX) : Free Stock Analysis Report
Orange (ORAN) : Free Stock Analysis Report
PLDT Inc. (PHI) : Free Stock Analysis Report
To read this article on Zacks.com click here.
Zacks Investment Research
- 3 Wireless Non-US Stocks Set to Ride on 5G, IoT Proliferation
Feb 16, 2023
The Zacks Wireless Non-US industry appears poised to benefit from a gradual revival in post-pandemic market conditions and a faster pace of 5G deployment despite supply chain disruptions and chip shortages. However, large-scale investments for infrastructure upgrades to support the transition to 5G, high inflationary pressures and a challenging macroeconomic environment have eroded the sector's profitability.
Nevertheless, América Móvil, S.A.B. de C.V. AMX, Orange S.A. ORAN and PLDT Inc. PHI might benefit in the long run from significant long-term growth opportunities and rising demand for scalable infrastructure for seamless connectivity with the wide proliferation of IoT.
Industry Description
The Zacks Wireless Non-US industry comprises mobile telecommunications and broadband service providers based on foreign shores. These companies primarily offer voice services, including local, domestic and international calls, roaming services and prepaid and postpaid. The firms provide value-added services, such as the IoT, comprising logistics and fleet management and automotive and health solutions. They also offer content streaming, interactive applications, wireless security services and mobile payment solutions. Some industry players sell mobile handsets and accessories through dealer networks and offer co-billing services to other telecommunications service providers. The firms provide IT solutions, cable and satellite pay television subscriptions, as well as data services and hosting services to residential and corporate clients.
What's Shaping the Future of Wireless Non-US Industry
Holistic Growth Model: In addition to delivering mission-critical communication services, the companies are taking steps to accelerate subscriber additions and improve churn management. They aim to offer an exceptional wireless experience to consumers and business customers by providing superior network connectivity. The wireless carriers are expanding their footprint while adopting unlimited plans to enhance average revenue per user. They are progressing on strategic objectives, growing their customer base by increasing handset connections and customer loyalty to boost revenues and profitability. Furthermore, the industry participants are taking a holistic approach to content delivery. They are offering various pathways for delivering services through a combination of network-based video transcoding and compression technologies to provide IP video formats, live TV and streaming services.
Focus on Network Upgrade: With the exponential growth of mobile broadband traffic and home Internet solutions owing to the increasing work-from-home trend, user demand for coverage speed and quality has increased manifold. This has resulted in a massive demand for advanced networking architecture, forcing service providers to upgrade their networks to support the surge in home data traffic. Further, there is a continuous need for network tuning and optimization to maintain superior performance standards, creating demand for state-of-the-art wireless products and services. Moreover, telecom services show a weak correlation to macroeconomic factors as these are considered necessities. This, in turn, has led the carriers to focus more on network upgrades to cater to evolving customer needs. The convergence of network technologies requires considerable investments from traditional carriers (telecom and cable) and cloud service providers. Although these investments will eventually help minimize service delivery costs to support broadband competition and wireless densification, short-term profitability has largely been compromised.
Profitability Woes Persist: Uncertainty regarding the chip shortage and supply-chain disruptions extending beyond semiconductors have crippled the manufacturing operations of most firms, leading to curtailed production schedules. This has led to a demand-supply imbalance, as the industry faces a dearth of essential fiber materials, shipping delays and shortages of containers and other raw materials, affecting the expansion and rollout of new broadband networks. Extended lead times for basic components have negatively impacted the delivery schedules and escalated costs. Moreover, raw material prices have risen significantly owing to economic uncertainty driven by the Russia-Ukraine war, soft market conditions in China and coronavirus-led adversities, affecting the short-term profitability of most firms. Wireless operators have been facing challenges due to the disruptive rise of over-the-top service providers in this dynamic industry. Price-sensitive competition for customer retention in the core business is expected to intensify in the coming days. Aggressive competition could limit their ability to attract and retain customers and affect operating and financial results.
Zacks Industry Rank Indicates Bullish Trends
The Zacks Wireless Non-US industry, which has 13 constituent companies, is housed within the broader Zacks Computer and Technology sector. It currently has a Zacks Industry Rank #21, which places it in the top 8% of more than 250 Zacks industries.
The group’s Zacks Industry Rank, which is the average of the Zacks Rank of all the member stocks, indicates bright near-term prospects. Our research shows that the top 50% of the Zacks-ranked industries outperform the bottom 50% by a factor of more than 2 to 1.
Before we present a few non-US wireless stocks that you may want to consider for your portfolio, let’s take a look at the industry’s recent stock market performance and valuation picture.
Industry Outperforms Sector, Lags S&P 500
The Zacks Wireless Non-US industry has outperformed the broader Zacks Computer and Technology sector but lagged the S&P 500 composite in the past year.
The industry has lost 13.5% over this period compared with the S&P 500’s and sector’s decline of 9.2% and 17.8%, respectively.
One-Year Price Performance
Industry's Current Valuation
The Enterprise Value-to-EBITDA (EV/EBITDA) ratio is commonly used for valuing wireless stocks. The industry currently has a trailing 12-month EV/EBITDA of 5.12X compared with the S&P 500’s 12.17X. It is also trading below the sector’s trailing 12-month EV/EBITDA of 9.72X.
Over the past five years, the industry has traded as high as 22.54X, as low as 1.43X, with a median of 6.72X, as the chart below shows.
Enterprise Value-to-EBITDA Ratio (Past Five Years)
3 Non-US Wireless Stocks to Keep a Close Eye on
América Móvil: Based in Mexico City, America Movil is the leading provider of integrated telecommunications services in Latin America. It offers enhanced communications solutions in 25 countries in Latin America, the United States and Central and Eastern Europe. The company has launched a 5G network in Austria. America Movil has also launched 4.5G networks in Brazil, Mexico and Dominican Republic that can deliver speeds up to 10 times faster than 4G to allow subscribers to experience voice and video in high definition. The Zacks Consensus Estimate for its current-year earnings has been revised 7.8% upward since July 2022. The stock has gained 8.8% in the past year and has a long-term earnings growth expectation of 8.5%. It has a VGM Score of B. America Movil currently carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Price and Consensus: AMX
Orange: Headquartered in Paris, Orange is one of the world’s leading telecommunications carriers with a presence in 26 countries. The company is also a leading provider of global IT and telecommunication services to multinational firms under the brand Orange Business Services. It has partnered with Move Capital to invest in the ‘Move Capital I’ venture capital fund that will empower Orange Business Services to become an integral stakeholder with a recognized panel of European technology companies. The combined synergies created from this partnership will allow European tech companies to reinforce their competitiveness and fortify Orange’s leadership in the region. The stock has a VGM Score of A. The Zacks Consensus Estimate for its current-year earnings has been revised 6.2% upward since October 2022. It carries a Zacks Rank #2.
Price and Consensus: ORAN
PLDT Inc.: Headquartered in Makati City, the Philippines, PLDT is the leading telecommunications provider in the Southeast Asian country. It has a strategic partnership with Rocket Internet SE, a European Internet company, to develop online and mobile payment solutions. PLDT operates the country's most extensive international submarine cable network and has activated the US-Transpacific Jupiter cable system to strengthen its extensive fiber network. The company is set to expand further with the completion of two more major international cable systems, namely Asia Direct Cable and the APRICOT cable system, set to be completed in the next two years. The consensus estimate for its current-year earnings has been revised 5.1% upward since September 2022. The stock has a long-term earnings growth expectation of 8.8%. PLDT sports a Zacks Rank #1.
Price and Consensus: PHI
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
America Movil, S.A.B. de C.V. (AMX) : Free Stock Analysis Report
Orange (ORAN) : Free Stock Analysis Report
PLDT Inc. (PHI) : Free Stock Analysis Report
To read this article on Zacks.com click here.
Zacks Investment Research
- Mexico's America Movil projects $8 billion to $8.2 billion investment in 2023
Feb 15, 2023
MEXICO CITY (Reuters) - Mexican telecommunications firm America Movil expects to invest between $8 billion and $8.2 billion in 2023, which includes radio-frequency concessions, fiber-optic network expansions and digitalization, a company executive said Wednesday.
The estimate is in line with the company's plan to invest $24 billion over three years, Chief Financial Officer Carlos Garcia said in a call with analysts.
The company invested around $7.9 billion last year, Garcia said, which could bump up 2023's capital expenditures "because we have some things (budgeted to be spent in 2022) that we are going to (spend on) this year."
The firm, controlled by the family of billionaire Carlos Slim, saw its fourth-quarter profit slide by 90%, it reported Tuesday. It was largely dinged by the deconsolidation of a Chilean subsidiary and currency headwinds, it said.
The results reflected "profitability pressures related to the inflationary backdrop that increased cost of service and (selling, general and administrative expenses)," analysts at Actinver said in a note.
America Movil expects to enact price hikes in 2023, though it is still evaluating which countries will see the increases, executives said Wednesday on the call.
Shares in the firm were down around 2% on Mexico's main stock exchange following the call.
(Reporting by Kylie Madry, Aida Pelaez-Fernandez and Cassandra Garrison; Editing by Caitlin Webber)
- UPDATE 2-Mexico's America Movil projects $8 bln to $8.2 bln investment in 2023
Feb 15, 2023
(Updates with information from call, analyst note, share price)
MEXICO CITY, Feb 15 (Reuters) - Mexican telecommunications firm America Movil expects to invest between $8 billion and $8.2 billion in 2023, which includes radio-frequency concessions, fiber-optic network expansions and digitalization, a company executive said Wednesday.
The estimate is in line with the company's plan to invest $24 billion over three years, Chief Financial Officer Carlos Garcia said in a call with analysts.
The company invested around $7.9 billion last year, Garcia said, which could bump up 2023's capital expenditures "because we have some things (budgeted to be spent in 2022) that we are going to (spend on) this year."
The firm, controlled by the family of billionaire Carlos Slim, saw its fourth-quarter profit slide by 90%, it reported Tuesday. It was largely dinged by the deconsolidation of a Chilean subsidiary and currency headwinds, it said.
The results reflected "profitability pressures related to the inflationary backdrop that increased cost of service and (selling, general and administrative expenses)," analysts at Actinver said in a note.
America Movil expects to enact price hikes in 2023, though it is still evaluating which countries will see the increases, executives said Wednesday on the call.
Shares in the firm were down around 2% on Mexico's main stock exchange following the call. (Reporting by Kylie Madry, Aida Pelaez-Fernandez and Cassandra Garrison Editing by Caitlin Webber)
- America Movil (AMX) Q4 Earnings & Revenues Decrease Y/Y
Feb 15, 2023
America Movil, S.A.B. de C.V. AMX reported net income per ADR of 22 cents for fourth-quarter 2022, down from $1.96 reported in the prior-year quarter.
Net income in the December quarter was Mex$13,710 million or Mex$0.22 per share compared with Mex$131,986 million or Mex$2.03 per share in the year-ago quarter. The bottom line was affected mainly due to the deconsolidation of Claro Chile.
The company had a comprehensive financing cost of Mex$8,301 million, down 57.5% from the year-earlier quarter’s comprehensive financing costs of Mex$19,550 million.
America Movil, S.A.B. de C.V. Price, Consensus and EPS Surprise America Movil, S.A.B. de C.V. Price, Consensus and EPS Surprise
America Movil, S.A.B. de C.V. price-consensus-eps-surprise-chart | America Movil, S.A.B. de C.V. Quote
Revenues
Total quarterly revenues decreased 2.4% to Mex$215,962 million owing to unfavorable foreign currency movement and weakness in service and equipment revenues.
Service revenues were Mex$172,695 million, down 1.4% year over year. Equipment revenues totaled Mex$35,381 million, down 4.8%.
America Movil gained 3.3 million wireless subscribers in the fourth quarter. This figure includes 1.5 million postpaid subscribers. Brazil, Austria and Colombia were the primary contributors to postpaid subscriber growth. The company witnessed an increase of 1.8 million in prepaid subscribers. The company had 300 million wireless subscribers at the end of the fourth quarter.
On the fixed-line, Broadband and Television platforms, the company ended the quarter with 73.2 million revenue-generating units.
The telco operates in multiple regions, namely Mexico, Brazil, Colombia, Peru, Ecuador, Argentina, Central America, the Caribbean, Austria and Other European countries.
Of these countries, Peru witnessed year-over-year revenue growth of 5.8% to 1,766 million Soles. The robust performance was driven by higher fixed-line and service revenues.
Argentina’s revenues came in at ARS 75,004 million, down 14.3% from the year-ago quarter’s levels. The downside was caused by declining service, fixed line, equipment and wireless revenues.
Story continues
Colombia’s revenues decreased 3% year over year to COP 3,742 billion, owing to lower equipment, fixed line and wireless revenues.
Revenues from Mexico, Brazil, Ecuador, Central America, the Caribbean, Austria and Other European regions witnessed year-over-year growth of 1.3%, 9.7%, 9.7%, 3.8%, 20.8%, 4.2% and 12%, respectively. However, Columbia saw a 3% year-over-year decline in revenues in the reported quarter.
Other Quarterly Details
Total costs and expenses were Mex$131,207 million, down 1.1% from the year-ago quarter’s levels. Overall, EBITDA declined 4.4% from the prior-year quarter’s levels to Mex$84,755 million. The EBITDA margin came in at 39.2% compared with 40.1% in the year-earlier quarter. The company’s operating profit decreased 7.2% to Mex$44,685 million.
Liquidity
As of Dec 31, 2022, America Movil had Mex$122,129 million in cash, marketable securities and other short-term investments with Mex$408,565 million of long-term debt.
Zacks Rank & Other Stocks to Consider
America Movil currently has a Zacks Rank #2 (Buy).
Some other top-ranked stocks in the broader technology space are Arista Networks ANET, Jabil JBL and Bandwidth BAND, each currently carry a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
The Zacks Consensus Estimate for Arista Networks 2023 earnings is pegged at $5.23 per share, rising 0.8% in the past 60 days. The long-term earnings growth rate is anticipated to be 17.5%.
Arista Networks’ earnings beat the Zacks Consensus Estimate in the last four quarters, the average being 14.7%. Shares of ANET have increased 10.7% in the past year.
The Zacks Consensus Estimate for Jabil’s 2023 earnings is pegged at $8.37 per share, rising 0.7% in the past 60 days. The long-term earnings growth rate is anticipated to be 12%.
Jabil’s earnings beat the Zacks Consensus Estimate in all the last four quarters, the average being 8.8%. Shares of JBL have increased 39.1% in the past year.
The Zacks Consensus Estimate for Bandwidth 2022 earnings is pegged at 37 cents per share, unchanged in the past 60 days. The long-term earnings growth rate is anticipated to be 25%.
BAND's earnings beat the Zacks Consensus Estimate in each of the trailing four quarters, the average surprise being 301.8%. Shares of the company have declined 59.2% in the past year.
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
America Movil, S.A.B. de C.V. (AMX) : Free Stock Analysis Report
Jabil, Inc. (JBL) : Free Stock Analysis Report
Arista Networks, Inc. (ANET) : Free Stock Analysis Report
Bandwidth Inc. (BAND) : Free Stock Analysis Report
To read this article on Zacks.com click here.
Zacks Investment Research
- Mexico's America Movil Q4 net profit tumbles, hit by Chile unit deconsolidation
Feb 14, 2023
MEXICO CITY (Reuters) -Mexican telecommunications giant America Movil reported on Tuesday a 90% drop in its fourth-quarter net profit from the same period a year earlier, mainly due to the deconsolidation of Claro Chile and currency headwinds. Net profit stood at $703 million (13.71 billion pesos), down from $6.8 billion (132 billion pesos). The company, which is controlled by the family of Mexican billionaire Carlos Slim, in October received regulatory approval to launch a joint venture in Chile with VTR. The firm's subsidiary, Claro Chile, in order to comply with antitrust concerns, will transfer its satellite television service to a trustee who will divest the service to a third party.
America Movil, in a statement to Mexico's main stock exchange, said net profit also took a hit "due to the depreciation of the Chilean currency against the Mexican peso in recent years."
The firm posted a 2.4% decrease in revenues, again partly driven by the appreciation of the Mexican peso versus other Latin American currencies.
Revenues reached 215.962 billion pesos.
Earnings before interest, taxes, depreciation and amortization (EBITDA), or core earnings, was 84.8 billion pesos, a decrease of about 4.4% in nominal terms from a year ago.
America Movil said it added 1.5 million postpaid customers in the quarter, driven by Brazil, Austria and Colombia. It also added 1.8 million prepaid customers, with the majority in Mexico.
There were 110,000 new broadband accesses and 97,000 new Pay TV customers, while the company lost 234,000 voice access lines.
($1= 19.5089 Mexican pesos)
(Reporting by Cassandra Garrison, Valentine Hilaire and Noe Torres; Editing by Chris Reese)
