Mercado Libre, a leading internet, technology, and payments company in Latin America, has evolved from an eBay-like platform to a comprehensive suite offering e-commerce, shops, payments, and logistics. The company, often seen as a blend of Alipay, eBay, and Amazon for Latin America, is instrumental in the region's rapidly growing internet user landscape, providing crucial services to startups. Mercado Libre's business encompasses six verticals: Marketplace, Logistics, Shops, Payments, Credits, and Ads. The Payments segment, modelled after Alipay, shows promising growth, with off-exchange payment volumes increasing by 122% in Q3. This, along with its dominant position in Marketplace and Logistics, sets Mercado Libre as a key player in Latin American commerce. The company's business model exhibits network effects across its product segments, enhancing user value. Revenues from traditional e-commerce and fintech have been growing consistently, with fintech revenue growth driven by the expansion of their payments offering. Despite competition, Mercado Libre remains the sole eCommerce giant in Latin America, poised to shape the future of eCommerce in the region. The company's valuation is considered reasonable, given its fast growth, improved financial metrics, and moderating capital expenditures since 2021.

Coupang, the largest e-commerce business in South Korea, has been upgraded to a "strong buy" by the author, given its impressive results and current share price, which is at a 68% discount to its IPO price. Despite a challenging macroeconomic environment, Coupang has consistently posted 20%+ YoY revenue growth rates each quarter since its IPO in 2021, outperforming peers like Amazon, Etsy, and Alibaba. Coupang's Q1 2023 revenue growth was driven by an increase in active customers and total net revenues per active customer. The company's market share in South Korea continues to rise, reinforcing its leadership position in e-commerce. Coupang has also seen considerable expansion in its gross margins due to the completion of its major CapEx cycle and a focus on unit economics. The company is generating positive adjusted EBITDA and net income, with its CEO guiding towards a long-term target of "10% or higher" adjusted EBITDA margins. Coupang has started generating positive free cash flow, and it trades at an attractive free cash flow yield with a strong balance sheet. The author encourages patient long-term investors to consider investing in Coupang, given its dominant market position and significant growth potential.

I have previously described Ranger as a company that provides proverbial “picks and shovels” to the energy industry. It is an onshore domestic oil services company that helps E&Ps service their wells, once drilled. While energy is a volatile, commodity-driven business, Ranger is a small, well-run, now unlevered company that should stay pretty busy as long as oil stays above, say, $50-60/barrel, which is a reasonable long-term assumption. Last year, Ranger generated $100 million of EBITDA on $700 million of sales, and it should do better this year. The business requires some capex, so the free cash flow of the business is around $70 million. Ranger has paid down its debt from over $75 million a year ago to almost zero today. Ranger’s market cap is $300 million, so the business is trading at 3x EBITDA and just over 4x Free Cash Flow. Now that its balance sheet is clean, it will start to buy back shares. At the current pace of FCF generation, it could buy back approximately 2% of its shares every month. With a low float and high insider ownership, it may not take much for the stock to re-rate

EnLink's Q1 2023 net EBITDA was slightly down from Q4 2022, but the company reconfirmed their net EBITDA guidance of $1,355MM. Despite strong volume growth across their assets, some segments were affected by lower commodity prices. The company's fastest-growing segment, the Permian, saw a slight decline in profits due to lower natural gas prices and lingering impacts from weather and earthquake events. However, EnLink has measures in place to combat these issues, including firm transportation agreements and hedging. The Louisiana segment reached a new profit record due to strong demand for NGLs and a tight fractionation market. The recent acquisition of the Tall Oaks Midcon system has boosted Oklahoma's segment profit. The company's unit price has shown weakness recently, but long-term demand for EnLink's assets is expected to increase due to upcoming LNG terminals from 2024-2032. Despite modest growth expected in 2023, the author suggests that EnLink is a good buy in the sub-$9 price range.

AB InBev's Q1 revenue increased by 13.2% YoY due to price increases and a modest volume uptick, and the company remains on track to meet full-year forecasts. Its strategy involves acquiring brands with growth potential, expanding distribution, and cutting costs, and it boasts significant fixed cost leverage and procurement pricing power. Despite facing challenges from craft and imported brands in the US, AB InBev maintains a wide economic moat due to its cost advantage, intangible assets, and vast worldwide scale and distribution. AB InBev has the ability to quickly react to competitive changes and has unique access to consumer data, aiding its adaptability to consumer tastes. The company expects a revival of margins in the next few years, driven by a return to average commodity costs, the US dollar, and premiumization. Despite the challenges brought on by the SABMiller acquisition and COVID-19, AB InBev's strong management team and company culture focusing on performance and shareholder value creation are expected to provide a competitive advantage and long-term value.

Comerica's valuation has been impacted by the collapse of Silicon Valley Bank and crypto-focused banks, which created a crisis in the community banking market. Despite this, Comerica has proven to be a stable community banking franchise with a de-risked deposit base, as shown by its Q1'23 results, including low net charge-offs, loan growth, and a 24.2% return on equity. Comerica's shares are currently trading at a 25% discount to book value. The bank has also increased its dividend by 4%, resulting in a forward dividend yield of 8.9%. Short-term risks include potential deposit withdrawals and a potential dividend cut to conserve liquidity. However, with a robust deposit base, the risk profile appears heavily skewed to the upside. Comerica is viewed as an opportunistic investment in the regional bank market with an asymmetric return profile.

BKI is a software provider to the mortgage servicing and origination industries. Shareholders agreed to sell the company to Intercontinental Exchange (ICE) for a package of cash and shares worth just about $75 per BKI share. In order to cure the only meaningful overlap between the two businesses, ICE has also offered to divest BKI’s mortgage origination unit. Despite the pending sale of this business to Constellation Software, the FTC sued to block the deal. It is now up to a federal judge to determine the merits of the case. We estimate a conservative value for BKI in a deal break scenario to be $51 per share. We acquired our stake for an average price of $60.59 per share. BKI shares ended the quarter at $57.56, implying just greater than a 25% chance of the deal succeeding. We handicap the odds at closer to 75%.

NYCB and FCNCA are similar investments, as they were the FDIC auction buyers of Signature Bank and Silicon Valley Bank, respectively. Both acquisitions occurred at deep discounts and should lead to impressive improvements in earnings. Though we invested after the purchases, both stocks had been depressed by the banking crisis. We see them emerging as stronger than they were entering the crisis, and believe both merit higher values going forward. We take further confidence by virtue of the FDIC deeming them capable of these acquisitions.

Axsome Therapeutics, a biotech company focused on psychiatry, is showing promising signs of growth. The company has recently had successes with the approval of Auvelity, an antidepressant with a novel mechanism of action, and the acquisition of Sunosi from Jazz. Auvelity's efficacy and safety differentiate it from competitors, and it posted sales of $15.7M in its first full quarter, with prescription numbers growing by 298%. Axsome also made $65.7M from out-licensing Sunosi's ex-USA rights. Despite a net loss of $11.2M in Q1 2023, the company's balance sheet shows $246.5M in cash and equivalents, expected to fund operations into 3Q2024. Risks include negative trial outcomes and slow sales growth for Auvelity. Despite these risks, the author rates Axsome a strong buy, with a 4.8/5 stars rating, noting potential for substantial sales growth and possible positive data from the ADVANCE-2 trial.