Motley Fool: Sea Limited offers solid growth, low valuation

Sea Limited (NYSE: SE) is based in Singapore, and it’s often referred to as the “Amazon of Southeast Asia.” Its three business units make it a triple threat in the digital economy:

• Shopee is Southeast Asia’s biggest e-commerce platform, having processed 13.9 billion orders worth $127 billion in 2025.

• Monee is Sea’s digital financial services platform, lending money to Shopee merchants to help them grow their businesses and offering “buy now, pay later” loans to consumers. It had 37 million active borrowers at the end of 2025, up 40% year over year, and they held $9.2 billion in loans, which was up by a whopping 80%.

• Finally, Garena is one of the world’s top game development studios. It’s responsible for global smash hits like Free Fire and Call of Duty: Mobile. It served over 633 million users during the fourth quarter of 2025.

Sea generated a record $22.9 billion in total revenue during 2025, a 36.4% year-over-year increase. It sports a strong balance sheet, ending 2025 with $11.1 billion in cash and equivalents on hand against just $510 million in debt. Best of all, its stock is attractively valued, with a recent price-to-sales ratio of 2.3, well below its five-year average of 3.7.

No company is risk-free, but given Sea’s robust growth and low valuation, it seems a solid opportunity for long-term investors. (The Motley Fool owns shares of and recommends Sea Limited.)

My dumbest investment

My most regrettable investing move? Well, I set a rule for myself when purchasing individual stocks. If the stock doubled in value, I’d sell half my shares, recouping my total investment and leaving the other half in the market as potential additional profit. I only violated that rule once – and what a mistake! I bought stock in Panera Bread at $20 per share. After a while, it was at $40. I should have sold half, but this time I sold it all, thinking it couldn’t go much higher. I forgot about it until I heard it was being bought out – at $315 per share. I could have retired sooner. – B.P., Brunswick, Ohio

The Fool responds: Deciding when and how much to sell can be tricky. Stay fully invested, and you have the most to gain – or lose. Sell it all, and you might miss out on future gains. Selling some, as you liked to do, can be an effective compromise, recouping some or all of your original investment and still leaving you set up for more gain. It’s worth thinking through each decision carefully, though, because many great stocks have doubled in value over and over and over. In such cases, as you learned, those who hang in there end up with the most.

(Do you have a smart or regrettable investment move to share with us? Email it to TMFShare@ fool.com.)

Ask the Fool

Q. If a company has a lot of sales, can it still be a bad investment? – L.C., Seattle

A. It could. Sales (also known as revenue) are what a company takes in from its products and/or services. But if it spends more than it takes in, it ends up with losses instead of profits. This all shows up on its income statement (sometimes called a “statement of earnings” or “statement of operations,” among other names). The statement starts with sales at the top, and then subtracts costs such as raw materials, salaries, advertising and taxes, eventually arriving at net income, which can be positive (net profit) or negative (net loss).

Ideally, a company will have growing revenue and growing profits. But even good companies can have a year or two of losses – perhaps because they are spending heavily on growth or because they are facing a temporary challenge. And younger, smaller companies may have years of losses. Unprofitability is not necessarily a deal-breaker, but it is safer to stick with companies that are reliably profitable.

Q. How small are “small-cap” companies and how large are “large-cap” ones? – S.M., Biloxi, Mississippi

A. There’s no universally agreed-upon categorization, but here’s one we use: Microcap companies have market capitalizations (that is, total market values) of about $50 million to $300 million; small-cap, $300 million to $2 billion; midcap, $2 billion to $10 billion; large-cap, $10 billion to $200 billion; and megacap, more than $200 billion.

For some current examples, Walmart (recent market cap: $1 trillion) is a megacap company, General Motors ($66 billion) is large-cap, The Campbell’s Co. ($6.6 billion) is midcap, Wendy’s ($1.3 billion) is small-cap, and apparel company J.Jill ($169 million) is microcap.