Right now, emerging-markets stocks are cheaper than they’ve been over the past 15 years—as measured by the Morningstar Emerging Markets Index—while U.S. stocks look overpriced compared with their long-term average valuations based on the Morningstar’s US counterpart.
Emerging-markets stocks look poised to gain as multiple tailwinds emerge, including a weakening U.S. dollar, and maturing economic conditions in several emerging-markets countries.
There are already signs of a rotation into emerging markets underway as investors prepare their portfolios for the world after monetary tightening. Today’s recommendation is a gem among emerging markets stocks that’s easy to get excited about…
MercadoLibre (MELI)
MercadoLibre is the undisputed titan in South America’s online retail arena. With a presence in 18 different countries and dominating market share in places like Brazil, this e-commerce powerhouse has outpaced even the likes of Amazon in the region.
Over the past decade, MercadoLibre’s growth trajectory has been nothing short of awe-inspiring. And guess what? The pandemic-led tailwinds only fueled the fire, accelerating e-commerce adoption and solidifying its position as a major player in South America’s bustling digital economy.
Let’s talk numbers, shall we? Brace yourself for astonishing records! With a jaw-dropping 5-year average revenue growth of over 56% and forward revenue estimates surpassing 30%, MercadoLibre is on a rocket ride. Their operating cash flow growth is soaring over 30% year-over-year, a staggering 4,500% higher than the sector median.
Just when you thought it couldn’t get any better, MercadoLibre’s recent second-quarter performance wowed us all. With GAAP earnings per share of $5.16, they crushed estimates by a whopping 88 cents. And their revenue soared to $3.42 billion, a solid 32.0% year-over-year increase, outpacing forecasts by a cool $150 million. Oh, and let’s not forget their Total Payment Volume, which reached an impressive $42.1 billion, marking a phenomenal 96.6% year-over-year growth on an FX-neutral basis.
MercadoLibre is a force to be reckoned with, and their growth story is far from over. So, if you’re on the lookout for a powerhouse stock with immense potential, look no further.
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