By coinnews 
00:00 Brad Smith
My next guest is watching three standout stocks amid continued volatility. Joining me now, we’ve got Michael Sancitara, who is the Silvant Capital Management CIO, managing director and senior portfolio manager. Good to have you here with us. So let’s start with Netflix. Walk us through what you like about NFLX shares right now.
00:24 Michael Sancitara
Sure. Thanks, Brad. Uh you know, Netflix continues to be the number one streaming content provider, uh, globally. They’ve held their position despite, you know, aggressive competition from the Disney’s, HBO Maxes, Paramounts, Apples of the world for the last few years. We saw a little bit of a lull in their growth a few years back as that competition increased. But now they’re really back on top, um, still spending the most money on content, uh a very large slate of good content coming at the second half of the year, um, stuff that’s well proven and has generated subscriber growth. And I think we’re actually at the point finally with Netflix where we’ve stopped worrying about subscriber growth specifically, that’s a data set they’re not giving us any longer. And we can really drill into the financials. The stock’s expensive, but you’re going to see, I think, better and better operating margins, better uh contribution from their ad tier revenue, and increased price increases. So it’s a stock that we think can continue to exceed investors expectations, um is not bothered by tariffs and uh is doing a pretty good job of bucking the trend of even in a concerning uh economic environment and sort of volatile market conditions.
02:15 Brad Smith
Yeah, indeed. We’ve seen NFLX shares up by about 35% over the course of 2025 here continuing to track that move. Also watching one of the other names that’s on your list, and this is MercadoLibre. This is not a company that might kind of fall into the the regular conversations, but why is this one at the top of your watch list?
02:45 Michael Sancitara
Yeah, you know, we like MercadoLibre. We have for some time now. Um, it’s the Amazon of South America, simply put. And what we’ve seen there is really their ability to hold Amazon at bay with a lot of these burgeoning countries, particularly in Brazil. So you’ve got a company where, you know, you’re growing revenue, uh gross margin volume. So basically the merchandise they sell, gross merchandise volume, north of 40% globally, uh 30% in Brazil this most recent quarter, which I think was greater than investors expected. And at the same time, uh taking some plays from the Amazon web, uh Amazon Web and Amazon playbook, you’ve seen MercadoLibre increase their fulfillment. So a larger portion of their business is now being fulfilled by themselves, which means their cost per fulfillment is lower. And that’s allowed them to continue to monetize um the sales that they generate on the platform. Additionally, and and maybe even more so than even an Amazon is their credit business. A large portion of South America is still unbanked and when you need to borrow money to buy stuff online, MercadoLibre is right there to lend you the money. So you’ve seen a company that has been very challenging to catch all the moves with with foreign exchange. It’s been very challenging to really gauge any one particular country’s movement. But when you back up as a whole and you look at where they sit in that industry, and where they sit geographically, it’s a company whose expectations continue to rise. Uh very hard to model which is stocks we typically like and what you see is is a good outperforming stock that’s continuing to take market share.
05:17 Brad Smith
It seems like this would be part of that kind of international diversification, uh play that we’re we’re increasingly hearing, especially coming off of the early innings of the year where all the talk was about US exceptionalism. And that is the portfolio strategy. But now we’ve seen investors and some of the strategists that we speak with here on Yahoo Finance talk more about where you need to have some emerging market exposure and specifically outside of the US. Is MercadoLibre not just that play, but how do you kind of build a basket, uh, that includes MercadoLibre and some of the other analogous type of companies?
06:20 Michael Sancitara
Sure. Um, you know, at the Virtus Silvent Focus Growth Mutual Fund and and strategy, we are really focused on US companies by and large. But we allow ourselves a small percentage of the fund, never more than 10%, in these very specific cases. So what we don’t want to do is make a call on the US economy versus the South American economy versus Asia. Our goal is just to pick the best stocks. So when we can find a company like MercadoLibre, um, that we can get good research on, we can understand, we can we can track its key metrics, we can we can add that to our portfolio, not only to help total return, but to your point, have a little bit less US economic exposure um in the fund itself. Again, not an international fund, it’s something we typically own very small positions in, relative to the rest of the strategy. But it is important to consider how can they exceed investor’s expectations, how can their key metrics, the way they manage their business, uh beat what’s already priced in. And and Meli has done a very good job of doing that for the last several years.
07:59 Brad Smith
Let’s talk about one more that you’re tracking here, GE Aerospace. What’s appealing there?
08:09 Michael Sancitara
Sure. Uh, you know, we’ve liked GE once they spun out the pieces of the company, particularly the aerospace division, was something we were interested in. Historically at Silvant, we weren’t particularly beyond interested, beyond much more than that. So we were excited to see that spin out, uh, purchase the shares a few years back. And we’ve been tracking really the expectations around engine deliveries. You’ve seen, um, GE really dominate the narrow body engine business. You’ve seen clients, customers, both business and uh retail travel uh increase over the last few years, which means more demand for planes, more demand for these more highly efficient, um, engines. And despite the fact that the supply chain has been a little bit challenged, GE has has exceeded expectations. Despite the fact that some of the OEM production, particularly from Boeing, has been capped, they’ve managed to beat expectations. And part of that’s been on their services business and their spare parts business, which are growing mid teens to 20% respectively. And that’s the kind of business we really like because it’s long tail. We think that the travel plans of most people are still largely intact globally. These these engines are really dominant in their space and GE is really capitalizing on the pure thing that they used to do before they became an unwieldy conglomerate. Um, they’re really capitalizing on the GE Aerospace portion of the business and we think that continues for multiple years.
10:06 Brad Smith
Michael, good to see you. Thanks so much for taking the time.
10:10 Michael Sancitara
Thanks, Brad.