In his first "Executive Decision" segment of Friday's Mad Money program, Jim Cramer spoke with Sebastian Kanovich, CEO of DLocal Ltd. (DLO) , the payments processor focused on emerging markets. DLocal came public in 2021 and shares currently trade at 46 times earnings.
DLocal is a global company, Kanovich explained, with 300 employees in six offices worldwide. Consumers don't necessarily see the DLocal name when they make purchases, but they're a vital link in the payments chain.
Many consumers in emerging markets don't have access to credit cards, which is why DLocal partners with companies like Visa (V) and Mastercard (MA) , but also deals in local wallets and cash payments. DLocal is used for both so-called "pay in" and "pay out" transactions, as it's important for companies to be able to accept payments from customers as well as pay out to employees and contractors.
Cramer said there aren't many beaten-down companies that are also profitable, but DLocal is one of them.
Let's check out the charts and technical indicators.
In this daily bar chart of DLO, below, we can see that prices traded lower from early September to a recent low in March. Prices have traded sideways to lower the past four months and are trying to form a base. DLO has crossed below and above the 50-day moving average line.
The trading volume has increased in recent days and the On-Balance-Volume (OBV) line has turned sideways from late January.
The Moving Average Convergence Divergence (MACD) oscillator has improved to the underside of the zero line and could soon give us an outright buy signal. A trade above the highs of February and March would be bullish.
In this weekly Japanese candlestick chart of DLO, below, we can see a bullish engulfing pattern in the first two weeks of March but we have not gotten bullish confirmation of the pattern.
In this daily Point and Figure chart of DLO, below, we can see a potential upside price target in the $59 area. A trade at $38 is needed to get an uptrend going.
Bottom line strategy: Unfortunately, we do not have much price history to work with on DLO. Prices are trying to bottom and an upside breakout and uptrend may have to wait. A close above $38 will be bullish and I see no reason to jump the gun.