The Ultimate Growth Stock to Buy With $3,000 Right Now

The Ultimate Growth Stock to Buy With ,000 Right Now

Free market (NASDAQ: MELI) it may not be a household name where you live. But that’s probably only because you don’t live where it operates. If you resided in South America, you certainly would have heard of it. There is even a good chance that you are a customer. After all, it is often called the Amazon (NASDAQ:AMZN) of Latin America, in particular because it enjoys an omnipresent presence there, similar to that of Amazon.

Just because you’re not a resident of its geographic market doesn’t mean you can’t tap into its growth potential. Indeed, investors outside of South America may want to make a point of tuning into this growth stock, if only to add some regional diversification to their portfolio. Of course, it doesn’t hurt that MercadoLibre stock also brings its own Amazon-like potential.

Being the Amazon of Latin America at the right time

The comparison with Amazon is fair, even if it is undoubtedly incomplete. MercadoLibre is also a payment intermediary and e-commerce/online auction platform. It is equally fair to say that the company is similar to both PayPal (NASDAQ:PYPL) And eBay (NASDAQ:EBAY).

No matter what it is, it works. MercadoLibre’s first-quarter revenue increased 36% year-over-year, extending a long streak of similar growth. Last fiscal year’s sales of $4.2 billion were more than 40% higher than the year before.

The Ultimate Growth Stock to Buy With ,000 Right Now

Data source: StockAnalysis.com. Table by author.

Which give? How can this company grow so well in such a difficult economic environment?

In many ways (but not each one way or another), Latin America is what North America was twenty years ago.

The rapid proliferation of Internet-connected smartphones now underway is one such solution. Figures from market research firm Canalys show that smartphone shipments to the region climbed 26% to 34.9 million in the first quarter, marking the third consecutive quarter of double-digit growth after a prolonged lull caused by the pandemic.

And yet there are many others room for continued growth of the number of smartphone users on the continent. The GSMA suggests that only 72% of Latin American residents own a mobile phone, while only 65% ​​of this population uses mobile internet service. But others are on the way. The GSMA estimates that mobile internet penetration in South America will reach 72% by 2030, when more than half of these connections will be ultra-high-speed 5G connections.

As was the case in other parts of the world, online shopping follows the advent of expanded access to the Web. Market research firm Americas Market Intelligence says Latin America’s e-commerce sector is expected to grow 24% this year, then 21% next year and 21% the year after that.

Why MercadoLibre is crushing it

MercadoLibre is not the only way to benefit from this growth. However, it is undoubtedly the best solution.

The company does not have a presence throughout South America, but it does business in 18 countries as well as Mexico. In particular, it offers its services in highly populated countries in Latin America, notably Argentina, Colombia and Brazil. Although its market share varies considerably from country to country, the company has more regular users of its services in the region than any of its competitors.

How has MercadoLibre been so successful in such a fragmented and highly competitive economic environment? By accomplishing the seemingly impossible task of being (proverbially) all things to all people.

Yes, it’s comparable to eBay. Just keep in mind that eBay isn’t just an auction site. Many sellers operate online stores using eBay’s “Buy It Now” option, as they can with MercadoLibre. The company also offers standalone shopping carts for sellers wanting to run their own e-commerce website. MercadoLibre even offers logistics services, processing 90% of packages ordered through its platforms.

The surprisingly robust suite of fintech solutions strengthens the reach and penetration of the company’s e-commerce arm. You see, MercadoLibre is not just a payment intermediary. It facilitates loans, offers its own credit card and provides physical merchants with payment acceptance equipment.

Combine all these different components into one integrated operation. The whole is greater than the sum of the parts. MercadoLibre is a powerful ecosystem that is not only in the right place at the right time, but capable of controlling all its competitors – including Amazon.

Don’t think too much about it with MercadoLibre

Analysts seem to think it’s a winner. Their current consensus price target for MercadoLibre shares stands at $2,027.22, nearly 30% above the stock’s current price thanks to its recent lull. Of the 22 analysts covering the company, 17 of them rate it as a Strong Buy, and none of those professionals view the stock as anything worse than a Hold. Analysts are also calling for an extension of its recent revenue and profit growth, at least for the next few years, driven by the maturation of South America’s mobile technology industry.

However, with or without optimism from the analyst community, MercadoLibre’s story alone makes MercadoLibre stock a compelling growth prospect.

Bottom line: don’t overthink it. If you have a few thousand dollars you’re looking to put to work but can’t find anything you like enough (i.e. something affordable enough) among the usual market growth suspects like Nvidia or Amazon, MercadoLibre is a great option that most other investors aren’t even aware of. Their lack of awareness only reinforces the depth of your opportunity.

Don’t miss this second chance and a potentially lucrative opportunity

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Right now, we’re issuing “Double Down” alerts for three incredible companies, and there may not be another chance like this anytime soon.

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*Stock Advisor returns June 11, 2024

John Mackey, former CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. James Brumley has no position in any of the stocks mentioned. The Motley Fool holds positions and recommends Amazon, MercadoLibre, Nvidia and PayPal. The Motley Fool recommends eBay and recommends the following options: short July 2024 $52.50 calls on eBay and short June 2024 $67.50 calls on PayPal. The Mad Motley has a disclosure policy.

The Ultimate Growth Stock to Buy with $3,000 Right Now was originally published by The Motley Fool

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