Markets may be riding high, but under the surface there are plenty of opportunities about for Stocks and Shares ISA investors.
In particular, high-quality growth stocks appear to offer the best value in many years. Here are two that I think merit closer examination today.
MercadoLibre
Imagine there was a company that combined Amazon, PayPal, and eBay in one, while operating across an entire continent. Well there is, in the shape of MercadoLibre (NASDAQ:MELI).
It resembles Amazon in the sense of running a massive logistics operation to support Latin America’s leading e-commerce marketplace. Meanwhile, its Mercado Pago fintech platform has similarities to PayPal, but is growing much more quickly.
These businesses combine to form one powerful ecosystem. But while Q1 revenue and financial income grew 49% to $8.84bn — the fastest growth in nearly four years — the stock is down 33% over the past year.
This is because the company’s margins have been under pressure due to the firm pouring money into building additional warehouses, lowering the free shipping threshold, and expanding credit throughout the fintech business.
Naturally, Wall Street hates it when companies sacrifice near-term profits to drive long-term growth. And there is fierce competition from Amazon in the region, adding risk to the investment case.
However, I think this is a classic case of investors not seeing the forest for the trees. That’s because e-commerce and digital banking are taking off across Latin America (and it’s still early days), while MercadoLibre’s growth is accelerating.
In particular, the company’s advertising opportunity remains very large. Digital ad revenue rocketed 63% in Q1.
Our huge audience and rich first-party data mean we are uniquely placed to capitalize on structural changes taking place in the advertising industry.
MercadoLibre
As a shareholder, I want to see management put the pedal to the metal to capitalise on this long-term opportunity. And with the stock currently trading at a historically low valuation, I think it’s worth serious consideration.
Note, Big Short investor Michael Burry sees a lot of value here, as he’s been buying shares recently.
Wise
Another quality growth stock that has been under pressure recently is Wise (LSE:WISE). It has slumped 24% in the past month after reports that the cross-border transfer specialist faces a probe in Belgium over money laundering.
Now, it’s early days and we don’t know the full facts. But there’s the potential for reputational damage and/or fines if significant illicit proceeds have flowed through Wise’s network.
However, if this investigation becomes a minor footnote in history, there could be a very attractive opportunity here. That’s because the company is still growing strongly, with Q4 FY26 showing noticeable progress.
- Quarterly cross-border volume increased 26% to £49.4bn
- Active customers grew 22%to 11.3m
- Customer holdings rose 37% to £29.4bn
- Underlying income jumped 24% to £435.3m
Meanwhile, Wise continues to separate itself from rivals by lowering the cross-border take rate by 1 basis point to 0.51%. And 75% of transfers were instant (up from 65% the year before).
In other words, the service is getting cheaper and faster.
We are making good progress on building the network for the world’s money…More people are using Wise at home or abroad for their everyday spending, for paying bills, for savings and investments.
Wise
After the recent pullback, the stock’s trading at a cut-price 19.5 times forward earnings.
Should you invest £5,000 in Wise Plc right now?
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Ben McPoland owns shares in MercadoLibre and Wise.
