🇧🇷 NU and MELI on sale! Market panic or buying opportunity? $MELI $NU
Today’s trading looks pretty wild for Brazilian stocks. Following the presidential election, which Luiz Inácio Lula da Silva won once again, a sharp sell-off is underway.
📉 Nubank ($NU) – down approximately 23% in early premarket trading.
📉 MercadoLibre ($MELI) – down approximately 11% in early premarket trading.
I hold both companies in my investment portfolio, and personally, I see the current sell-off more as a potential opportunity.
Why?
One thing about the whole situation strikes me as interesting. Lula has been president of Brazil since January 2023. So let’s look at how these companies have performed during his administration.
🟣 Nubank ($NU)
139 million customers.
Quarterly revenue growth of 39% year over year.
Quarterly net profit of USD 1.1 billion, up 49% year over year.
ROE of 33%.
🟡 MercadoLibre ($MELI)
Quarterly revenue growth of 50% to USD 10.2 billion.
Mercado Pago reached 88 million monthly active users.
Advertising business grew 73% year over year in USD.
In Brazil, the number of items sold increased by 56%.
And all of this is happening during Lula’s administration!
So what actually changed?
The market expected Bolsonaro to win and a more favorable fiscal policy. That scenario didn’t materialize, and investors are now repricing political and macroeconomic risks.
Of course, a weaker Brazilian real, high interest rates, and public finance problems could negatively affect both companies’ results. For Nubank, credit portfolio quality also needs to be monitored closely, while for MELI, it’s the development of operating margins.
But in my view, the election results themselves don’t change the long-term investment thesis or the competitive advantages of these companies.
NU continues to transform banking in Latin America. MELI is building a massive ecosystem of e-commerce, logistics, advertising, and financial services.
And these are exactly the kinds of companies I want to own for the long term.
My take?
I’m not trying to predict politics or time the market. I want to own high-quality growth companies at reasonable prices.
I already have both companies in my portfolio, and after today’s sell-off, I’ll be watching closely for opportunities to buy more.
What matters most to me is where their revenue, profits, margins, and competitive position will be in 5–10 years. Not how the market reacts to one election.
💬 What do you think? Is the current sell-off in NU and MELI justified, or is it an overreaction by the market? Are you buying more?
This is not investment advice. I own both companies in my portfolio.
