Spoiler alert: You’ll laugh out loud. (And if you didn’t invest, you might now.)
Interesting question. If you had only $1,000 invested in stocks, MercadoLibre (Merry -1.29%) If you bought this stock 10 years ago, how much would it be worth today? The answer will either please or infuriate you, depending on whether you held the stock for that long. $20,605. That’s a 35.3% annual growth rate! By comparison, S&P 500 The index increased an average of 11.7% over the year, bringing $1,000 to $3,011.
While this information is certainly useful, it’s not particularly helpful for current holders of the stock or those considering investing in MercadoLibre, as investors need to look more toward the future rather than back in time.
The key question is, where is MercadoLibre going going forward? Does the company seem undervalued, but does it have sustainable competitive advantages and is it still growing rapidly? If so, it may be worth buying and/or holding. Does it seem overvalued after the growth it has seen and the challenges it has faced so far? If so, either sell or continue to hold while keeping an eye on the company.
If you don’t know much about MercadoLibre, it’s worth getting to know about the company because it could be a strong performer for your portfolio. Some people call it Amazon and PayPalThat’s because the company features a dominant online marketplace and a strong fintech business.
In fact, in his words,
MercadoLibre operates the largest online commerce and payments ecosystem in Latin America. We operate in 18 countries, including Argentina, Brazil, Mexico, Colombia, Chile and Peru. Based on unique visitors and page views, we are the market leader in the main countries where we operate.
Clearly, this company is growing fast: in the most recent quarter, constant currency revenue nearly doubled year over year, and gross merchandise volume (GMV) increased 71%. The stock looks fairly valued rather than cheap at the moment, so you could buy it with the intention of holding for the long term, buy a little at a time over time, or simply add it to your watchlist in the hope that the stock price will drop.
John Mackey, former CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. Serena Malanjian has investments in Amazon, MercadoLibre, and PayPal. The Motley Fool has invested in and recommends Amazon, MercadoLibre, and PayPal. The Motley Fool recommends short PayPal’s June 2024 $67.50 call options. The Motley Fool has a disclosure policy.
