As the Trump administration’s unpredictable tariffs, unresolved trade wars, geopolitical conflicts, and other macro headwinds rattle the markets, it might seem like a risky time to buy stocks. But according to Warren Buffett, investors should “be greedy only when others are fearful.”
So as some fearful investors wait on the sidelines, it could be a great time to get greedy with some long-term winners. Today, I’ll highlight three of my personal favorites: MercadoLibre(NASDAQ: MELI), Amazon(NASDAQ: AMZN), and Ferrari(NYSE: RACE).
Image source: Getty Images.
I started to invest in MercadoLibre, the largest e-commerce company in Latin America, just over four years ago. My investment has more than doubled in value since then, but I believe it still has plenty of upside potential.
MercadoLibre operates in 19 Latin American countries. It’s based in Uruguay but most of its customers are located in Argentina, Brazil, and Mexico. It also operates one of the region’s largest fintech platforms, which includes the digital payments platform Mercado Pago and credit platform Mercado Crédito. It established an early mover’s advantage against regional and overseas competitors by building a robust logistics network across Latin America’s underdeveloped regions.
MercadoLibre served 100 million annual unique active buyers on its marketplace and 60 million fintech monthly active users at the end of 2024 — but those numbers were only a small portion of the 451 million adults across Latin America and the Caribbean. As Latin America’s income levels and internet penetration rates continue to rise, so will MercadoLibre’s number of active buyers, merchants, and fintech customers.
From 2024 to 2027, analysts expect MercadoLibre’s revenue and earnings per share (EPS) to grow at compound annual growth rates (CAGRs) of 25% and 34%, respectively.
MercadoLibre stock isn’t a screaming bargain at 51 times this year’s earnings. Still, it should maintain that higher multiple as long as the company keeps locking in more customers and expanding its core ecosystems.
I bought my first shares of Amazon nine years ago, and that investment has blossomed more than 550% to become the largest position in my portfolio. However, I think it’s still a great stock to accumulate because its e-commerce and cloud businesses are still thriving.
Amazon operates online marketplaces in more than 20 countries, provides international shipping to more than 100 countries, and serves more than 220 million Prime subscribers worldwide. It also leads the global cloud infrastructure platform market with Amazon Web Services (AWS).
Most of Amazon’s revenue comes from its retail business, which also includes Whole Foods Market and Amazon Go stores, but most of its profits are from AWS. That unique business model enables it to subsidize the expansion of the lower-margin retail business (including its Prime ecosystem) with higher-margin cloud revenue.
Amazon’s retail business faces constant pressure from other e-commerce marketplaces and big brick-and-mortar retailers. However, its scale, the stickiness of its Prime subscriptions, and the growth of its cloud business — which is driven by artificial intelligence (AI) — should offset those headwinds. From 2024 to 2027, analysts expect revenue and EPS to grow at CAGRs of 10% and 17%, respectively.
The stock is still reasonably valued at 33 times this year’s earnings. And it remains one of the most balanced ways to invest in the e-commerce, cloud, and AI markets.
I initially invested in Ferrari three years ago, and my investment has appreciated roughly 130%. But just as with MercadoLibre and Amazon, I think it’s still smarter to accumulate the supercar maker’s stock than to trim it, because it operates one of the world’s best-run businesses.
Ferrari is a great investment because it targets affluent customers who are resistant to economic downturns, it has nearly unlimited pricing power, and it only produces small batches of vehicles. It only delivered 13,752 vehicles worldwide in 2024, and that limited production keeps its vehicles scarce and insulates it from supply chain disruptions.
By the end of 2024, its production was fully booked through 2026 — which means new customer orders won’t be fulfilled until 2027. That healthy backlog, along with Ferrari’s pricing power, makes it easy to predict a growth trajectory. From 2024 to 2027, analysts expect its revenue and EPS to rise at CAGRs of 8% and 10%, respectively.
Ferrari stock might seem a bit pricey, at 47 times this year’s earnings. But an evergreen business model, loyal customer base, and ability to weather most of the competitive and supply chain issues that are plaguing many other automakers all justify that higher valuation.
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John Mackey, former CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. Leo Sun has positions in Amazon, Ferrari, and MercadoLibre. The Motley Fool has positions in and recommends Amazon and MercadoLibre. The Motley Fool has a disclosure policy.
My 3 Favorite Stocks to Buy Right Now was originally published by The Motley Fool
