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No. of Recommendations: 2
I have worked on getting a FCF number to use for the base DCF. I figured the FCFF as 50.155 Million. This is Free Cash to the Firm as if MELI had a higher tax rate (MELI has an unsustainable low tax rate). I have deducted some based on the way they collect receivables. They seem to use securization. The way they did it made a lot of cash get put into FCF last year and made FCF look low this year. Tim Hanson helped me understand this (Thanks Tim). OK so to the DCF.

Using a diluted share count of 44.144M and 15% Discount and price of $39.70 I get:



5 year growth Next 5 Terminal Intrinsic MOS

30% 15% 0% 34.02 -17%

30% 30% 0% 50.74 +22%

30% 15% 2% 36.46 -9%

This is just a few. If you use 7 years at 30% then 15% for the next three and 0% terminal = 40.51 Intrinsic which is close to price. So there is some expectations in this stock. My reasonable estimates say buy around 30xFCFF or below. I did use EV so I did adjust for extra cash.Cash is slightly more than 1xFCFF. Bottom line is I'll buy at $35 or below.
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