MELI Stock- Is MercadoLibre Stock a Better Buy than Amazon Stock?

0:00 Is mercado libre stock listed under ticker symbol m-e-l-i a better buy than amazon stock amazon stock has rewarded loyal investors with inconceivable returns over the long term investors buying amazon stock in 2021 and holding for the long term will likely be rewarded as amazon is a fundamentally sound company with steep competitive modes and a booming cloud computing business that is growing rapidly has high margins and tends to retain customers

0:28 Due to high switching costs despite these strong fundamental characteristics amazon is a mature business with an enterprise value of 1.72 trillion dollars which might make it not the right investment for someone with a long time horizon and an appetite for a higher risk higher reward type of stock mercado libre incorporated is an e-commerce and fintech company that has a lot of the same strong fundamental qualities that have made amazon successful

0:56 Over the years but this company is actually trading at less than 1 20th of the enterprise value that amazon currently is many investors like to think americato libre as the amazon of latin america pretty similar to how alibaba is oftentimes thought of as the amazon of china but this equivalence between mercado libre and amazon is not entirely correct similar to amazon in the united states mercado libre is the largest e-commerce ecosystem in latin america

1:26 With availability in 18 countries furthermore mercado libre's revenues have grown at an impressive rate similar to that of amazon's revenues with a compound annual growth rate of 36.3 percent over the last five years in contrast to amazon however mercado libre is not involved in the highly profitable cloud computing business the amazon has been dominating for years instead of attempting to break into the cloud computing business mercado libre has

1:54 Found its own lucrative niche by becoming a trailblazer and financial technology solutions in latin america mercado pogo is a financial technology solution that allows its users to easily securely and promptly send and receive payments online and it is currently available in seven of the 33 latin american countries pedro arm the cfo of mercado libre calls this proprietary fintech a critical lever within mergado libre's ecosystem to democratize money

2:26 And access to financial services an aspect of mercado libre's financial technology that the average growth investor will find very exciting is the fact that this technology actually has very broad applications in a region that has some of the highest internet penetration growth rates in the world in addition to mercado pogo having broad applications for businesses and consumers in latin america executive management of mercado libre seems to actually think that this

2:56 Business segment is in its early stages and consequently has years of strong growth ahead of it the ceo of mercado libre stelio pasos tolda actually said in the most recent shareholder meeting that mercado libre is still in the early days of bringing foundational financial services to more and more people in latin america originally mercado pago was designed to facilitate transactions in the mercado libre marketplace however the spintex solution evolved from its

3:26 Initial purpose and now can be used to facilitate transactions on other websites and mobile apps mericado pogo can even process transactions in brick and mortar stores through qr codes and mobile point of sale devices as an investor might expect mercado libre collects fees from sellers based on the amount of payment volume that actually goes through mercado libre's payment processing solution but this is not the only way that mercado pogo is generating revenues

3:55 As the company does provide other financial services including extending credit to businesses and customers through their mercado credito service and actually helping customers invest funds into low-risk assets through their mercado fondo service essentially mercado libre is building an entire digital financial services ecosystem in latin america the global pandemic has accelerated the shift from cash to online payment methods in latin america as consumers prioritize

4:26 Convenience and safety in a survey presented by mercado libre about the effects of the pandemic on consumer behavior 7 out of 10 respondents in the countries where mercado pago is available said that they would continue to choose online payments as their payment method this fintech could always be disrupted in a world where technology is constantly evolving however the bet that mercado libre's financial services revenues will continue to grow is a solid one and

4:55 Even if mercado libres fintech is unexpectedly disrupted by a competitor their e-commerce business segment would make an attractive investment on its own fundamental merits mercado libres q2 2021 earnings is due to release this afternoon after market closed if mercado libre does not meet analysts high expectations then melee stock could end up dropping and therefore creating an opportunity for investors to get into the stock for the long term investors saw a

5:26 Similar dynamic play out with amazon stock after the company released its q2 2021 earnings regardless of the short term price action my personal opinion is that melee stock is a solid choice for a long-term investment if you would like to watch a video that details why i started 905 investing that also happens to feature a demo of the xl18 flamethrower then click the thumbnail on the right