Nov 10, 2023
Following third quarter earnings, we elected to add to our positioning in MercadoLibre (MELI) as the company continues to execute at a remarkably high level. We also elected to pare back our energy exposure by trimming Vista Energy (VIST) and exiting Peabody Energy (BTU) and Cenovus Energy (CVE).
Let’s dive in.
MercadoLibre (MELI) smashed earnings last week as the company continues to gain share in its core markets with plenty of margin and revenue drivers at their disposal. Total value of merchandise (GMV or total value of goods sold on the platform) grew a staggering 59% year-over-year and the company has consistently proven its ability to execute at a high level. With tailwinds firmly at their backs, we added to MELI with conviction.
Vista Energy (VIST) has performed remarkably well since we initiated the position in early May, benefitting from operational excellence and a normalizing macro backdrop. The Argentine presidential elections are in full swing and we felt it was prudent to take profits for clients ahead of a tightening presidential race.
We exited Peabody Energy (BTU) in an effort to dial back some of our energy exposure in our Offshore strategy. Management’s subpar execution in relation to their shareholder return program undermines our confidence in the company’s ability to execute heading into 2024, so an exit here felt prudent.
We also elected to exit Cenovus (CVE) in the spirit of paring back our energy exposure. As a result of recent performance, Offshore has an organically large overweight to the energy sector and exiting Cenovus, one of the smallest energy positions in the strategy, allows us to manage risk heading into year-end.
The results of the trades reduce our net exposure to ~75% (said differently, for every dollar invested, ~$0.75 is at risk). With a deep watchlist of holdings underwritten, we plan to be tactical and may look to initiate a position in one or more of those pipeline ideas as we approach year-end.
As always, let us know if you have any questions about the recent trades; we’re happy to assist.
– Your Titan Team
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