I have a brand-new recommendation that could be like buying Amazon (AMZN) in the halcyon days of the e-commerce boom, asserts growth stock expert Jimmy Mengel, editor of The Crow's Nest.

Every month, 197 million people visit Amazon to buy everything from albuterol inhalers to zinc supplements (those were actually the search results when I typed “A” and “Z”).  According to Big Commerce, Amazon’s share of the U.S. e-commerce market hit 49% in 2018. That’s 5% of all retail spent across the entire U.S.

It is more than Amazon’s top three competitors combined, with eBay (EBAY) coming in at 6.6%, Apple (AAPL) at 3.9%, and Walmart (WMT) at 3.7%. It’s only gone up since then. Just look at the returns over the last five years alone:


That’s a whopping 360% on a major blue chip. If you invested in the company way back in 1998, you’d be sitting on 20,000% gains. I wish I had done that, but I did not.

Now, while I still think Amazon is a perfectly safe investment, I’m looking at another company that is set to become the Amazon of — well — the Amazon.

MercadoLibre (MELI) is known as the “Amazon of Latin America.” Its name means “free market” in Spanish. That pretty much says it all. It’s operating in 18 countries including Argentina, Brazil, Mexico, Colombia, Chile, Venezuela, and Peru. 

If you’ve been to Central or South America, you know that most countries are very much brick-and-mortar type consumers. Mail delivery can be dicey and quick shipping isn’t really built into the culture. That is changing rapidly.

In the U.S., e-commerce is still less than 14% of total retail sales, but developing Latin American economies have much more room for growth. Latin America is the fastest-growing e-commerce region in the world.

Last year, e-commerce sales soared 63% and surpassed the $100 billion mark for the first time. That is a whole lot of new customers that will continue to be online buyers. Once you experience the ease of ordering something online, almost everyone continues to do so.

MercadoLibre is leading the way. The stock was up 985% in the last five years. This trend will continue.

The company just posted revenue of $1.7 billion, which is 103% higher than in the year prior and 15% higher than analyst estimates. It destroyed analyst expectations by 637% by posting earnings per share of $1.37.

Not only do they have a strong hold on traditional e-commerce, but the company is also looking to disrupt Latin America’s traditional banking industry with its Mercado Pago payment service.

While it was designed to support its e-commerce platform, it was successful enough that it moved to retail stores and in money transfers. While MercadoLibre is like Amazon, Mercado Pago is like PayPal and Square (SQ). 

In the second quarter, total payment volume rose 72% and “off-platform” usage nearly doubled compared to last year. All this is to say that we’re buying MercadoLibre as the Amazon and PayPal of Latin America. The sky is the limit here.

I suspect that MercadoLibre will mirror Amazon’s ride. It’s one of those stocks that might make you say “Oh, it’s already hit its peak” and ignore it. But any of us that have watched Amazon year after year should realize that there is nowhere to go but up.

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