Critical Analysis: Linkage Global (NASDAQ:LGCB) & MercadoLibre (NASDAQ:MELI)

Linkage Global (NASDAQ:LGCB) and MercadoLibre (NASDAQ:MELI) are both retail/wholesale companies, but which is the better investment? We will compare the two businesses based on the strength of their dividends, earnings, valuation, institutional ownership, risk, profitability and analyst recommendations.

Institutional & Insider Ownership

0.3% of Linkage Global shares are held by institutional investors. Comparatively, 87.6% of MercadoLibre shares are held by institutional investors. 0.3% of MercadoLibre shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock is poised for long-term growth.

Valuation and Earnings

This table compares Linkage Global and MercadoLibre”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Linkage Global	$5.10 million	2.99	-$7.37 million	N/A	N/A
MercadoLibre	$28.89 billion	3.03	$2.00 billion	$39.40	43.86

MercadoLibre has higher revenue and earnings than Linkage Global.

Analyst Recommendations

This is a breakdown of current ratings and recommmendations for Linkage Global and MercadoLibre, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Linkage Global	1	0	0	0	1.00
MercadoLibre	0	4	14	1	2.84

MercadoLibre has a consensus price target of $2,725.33, suggesting a potential upside of 57.70%. Given MercadoLibre’s stronger consensus rating and higher possible upside, analysts clearly believe MercadoLibre is more favorable than Linkage Global.

Profitability

This table compares Linkage Global and MercadoLibre’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Linkage Global	N/A	N/A	N/A
MercadoLibre	6.91%	33.73%	5.71%

Volatility & Risk

Linkage Global has a beta of -1.03, meaning that its stock price is 203% less volatile than the S&P 500. Comparatively, MercadoLibre has a beta of 1.48, meaning that its stock price is 48% more volatile than the S&P 500.

Summary

MercadoLibre beats Linkage Global on 13 of the 13 factors compared between the two stocks.

About Linkage Global

Linkage Global Inc, through its subsidiaries, operates as a cross-border e-commerce integrated services provider in Japan, Hong Kong, and Mainland China. It provides cross-border product sales; digital marketing services; and e-commerce operation training and software support services. Linkage Global Inc was founded in 2011 and is headquartered in Tokyo, Japan.

About MercadoLibre

MercadoLibre, Inc. operates online commerce platforms in the United States. It operates Mercado Libre Marketplace, an automated online commerce platform that enables businesses, merchants, and individuals to list merchandise and conduct sales and purchases digitally; and Mercado Pago FinTech platform, a financial technology solution platform, which facilitates transactions on and off its marketplaces by providing a mechanism that allows its users to send and receive payments online, as well as allows users to transfer money through their websites or on the apps. The company also offers Mercado Fondo that allows users to invest funds deposited in their Mercado Pago accounts; Mercado Credito, which extends loans to certain merchants and consumers; and Mercado Envios logistics solution that enables sellers on its platform to utilize third-party carriers and other logistics service providers, as well as fulfillment and warehousing services for sellers. In addition, it provides Mercado Libre Classifieds, an online classified listing service, where users can list and purchase motor vehicles, real estate, and services; Mercado Ads, an advertising platform, which enables large retailers and brands to promote their products and services on the web; and Mercado Shops, an online storefronts solution that enables users to set-up, manage, and promote their own digital stores. The company was incorporated in 1999 and is headquartered in Montevideo, Uruguay.