World · Daily Terminal
Even though major U.S. stock market indexes sit near all-time highs, it's possible to find beaten-down companies worth investing in. Consider Medtronic (MDT) and MercadoLibre (MELI), both leaders in their respective fields. These corporations have faced some challenges but remain excellent buy-and-hold options despite lagging the market lately.
1. **Medtronic** Medtronic has been rebounding over the past three months after spending most of the first half of the year moving south. The company's financial results have driven this rebound. In its first-quarter 2027 update (ended July 31), Medtronic’s revenue increased by 13.7% year over year to $9.8 billion. Adjusted earnings per share (EPS) rose by 15.1% to $1.45. The company raised its revenue growth and EPS guidance for fiscal 2027, marking a 'beat-and-raise' quarter. Despite a 2% year-to-date decline, Medtronic stock might be a steal for long-term investors. The company benefits from growth drivers like cardiac ablation solutions, which saw an 88% year-over-year increase in revenue. Its Hugo robotic-assisted surgery system is expected to gain traction, and the planned separation of its diabetes care segment will boost margins. Medtronic has raised its dividends for 49 consecutive years, positioning it as an excellent buy-and-hold option for long-term income seekers.
2. **MercadoLibre** MercadoLibre has faced increased competition in the e-commerce market in South America. To counter this, it has made significant investments that currently harm profits and margins, such as expanding free shipping offerings and doubling down on fintech initiatives. Despite these challenges, MercadoLibre remains a strong buy-and-hold stock. Its initiatives have boosted gross merchandise volume and revenue, benefiting from network effects and high switching costs. The company operates in underbanked regions, offering vast growth potential. Despite a 18% year-to-date decline, MercadoLibre’s future appears bright, making it a compelling investment opportunity for investors looking to initiate positions before potential rebounds.
Source: The Motley Fool
