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Top Stock Picks for Week of January 30, 2023

American Express Company AXP is a diversified financial services company, offering charge and credit payment card products, and travel-related services worldwide.American Express' shares have outperformed the industry in a year. Several growth initiatives, such as launching new products, enhancing existing features, reaching new agreements and forging alliances, are boosting its revenues. Consumer spending on travel and entertainment, which carry higher margins for AmEx, is advancing well. Its balance sheet looks strong with manageable debt. Solid cash-generation abilities enable the pursuit of business investments and capital deployment via share buybacks and dividends. American Express’ return on equity (ROE) reinforces its growth potential. The company intends to hike dividends by 15% to 60 cents per share, starting from the first quarter of 2023.

MercadoLibre, Inc. MELI is one of the largest e-commerce platforms in Latin America.MercadoLibre is benefiting from strength in the commerce and fintech businesses. Robust product offerings and credit portfolio expansion are respectively driving the company’s commerce and fintech revenues. We expect commerce and fintech revenues to be up 25.6% and 30% in 2022 year over year, respectively. Further, robust mobile-point-of-sale business and growing adoption of MercadoPago are driving the total payment volume growth of the company. Our estimate suggests that the total payment volume is likely to witness a 60.5% rise in the current year from the last year’s figure. Also, rapid adoption of Mobile Wallet remains a positive. The company’s focus on increasing monetization of transactions is a big positive. MercadoLibre had a strong balance sheet at the end of the third-quarter, 2022 compared with the end of the second-quarter, 2022.Further, the absence of current as well as long-term debt remains encouraging. The strong liquidity position will help the company pursue any strategic initiatives including acquisitions.

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