Finding the right stocks in today’s market isn’t easy. With so many options, it’s tough to know which ones are worth your attention. But when you get it right, the payoff can be huge. That’s why we do the heavy lifting for you, sorting through the noise to bring you stocks that are set to move.
Each week, we dig into the data, look at market trends, and identify stocks with real potential. Our focus is on opportunities that aren’t just good for a quick win but have the strength to deliver ongoing growth.
This week, we’ve highlighted three stocks that stand out from the pack. Backed by solid analysis, these picks are positioned for a strong run in both the short and long term.
Revolve Group (RVLV) – A Resilient E-Commerce Player Positioned for Long-Term Growth
Revolve Group (RVLV) has seen impressive gains this year, with shares up about 100% since January 2024. While the stock has experienced significant volatility—down around 170% from its 2021 peak—this recent pullback could present a unique buying opportunity for long-term investors.
In the current climate, Revolve has been able to navigate challenging consumer spending trends better than many of its peers. The company continues to grow its customer base, expanding by 5% year-over-year to reach 2.6 million active customers. Its diverse range of products, from affordable fashion to luxury brands, and strong partnerships with influencers and AI-driven solutions continue to support steady growth, with net sales increasing 10% in the third quarter to $283 million.
One of the most promising aspects of Revolve Group’s financials is its profitability. Despite facing some headwinds, the company reported a remarkable 238% year-over-year increase in net income in Q3, signaling strong operational efficiency. This success is backed by Revolve’s wide portfolio of over 100,000 products across multiple categories, including apparel, footwear, beauty, and home products.
Revolve’s underlying business is positioned for continued growth, benefiting from a growing e-commerce sector. With a solid customer base, a strong brand, and consistent profitability, this could be a high-potential stock to consider adding to your portfolio as it remains undervalued compared to its peak.
Enbridge Inc. (ENB) This Midstream Giant Offers Stability and a High Yield in the Energy Sector
Energy stocks can provide a great way to diversify your portfolio, but finding the right ones—especially high-yielders that offer stability—can be tricky. Many sectors in the energy market are highly commodity-driven, which means they can experience significant price fluctuations. That’s where Enbridge stands out.
Enbridge operates in the midstream segment of the energy industry, which provides some distinct advantages over upstream (drilling) and downstream (refining) companies. Unlike the volatile commodity-driven sectors, midstream companies focus on the infrastructure that supports the transportation of oil, gas, and other energy products. This model results in more consistent cash flows, making Enbridge an attractive choice for income-focused investors seeking stability.
The company boasts a remarkable 29-year streak of annual dividend increases, with a solid payout ratio in line with its 60-70% target. This consistency is backed by Enbridge’s diversified business, which spans across oil and natural gas pipelines, utilities, and even renewable power. It’s a highly diversified midstream giant with investment-grade credit ratings, making it one of the safest, most reliable dividend payers in the sector.
Despite a modest rally in 2024, Enbridge’s 6.1% dividend yield still stands out as one of the best opportunities in the energy space for those seeking reliable income.
If you’re looking to add stability to your portfolio without taking on excessive commodity risk, this could be a great opportunity to dive into a dependable high-yield stock.
MercadoLibre (MELI) – A Once-in-a-Decade Opportunity
Shares of MercadoLibre (MELI) have soared an incredible 6,560% since its IPO in 2007, making it one of the best performers in the e-commerce space. But even with this remarkable growth, the company’s best days could still be ahead. Recent volatility has knocked the stock down 10% despite a solid earnings report, and this pullback could present a rare opportunity to buy this high-growth stock at a discount.
MercadoLibre has been a leader in Latin American e-commerce for years, and the company is well-positioned to capture a large share of the growing $150 billion Latin American e-commerce market. With e-commerce penetration in the region still lagging behind the U.S., U.K., and China by roughly a decade, MercadoLibre is poised to benefit from the rapid growth in online shopping. The company estimates that it will capture over 50% of the incremental growth in the Latin American market, which is expected to grow 50% over the next four to five years. Although the company made substantial investments in building fulfillment centers in Brazil and Mexico—which affected short-term profits—these investments are expected to drive long-term growth and cash flows.
But MercadoLibre’s potential isn’t limited to its current markets. The company still generates the majority of its revenue from just three countries: Brazil, Mexico, and Argentina. Other Latin American countries like Chile, Colombia, Peru, and Ecuador have significant untapped potential, as e-commerce penetration in these markets is still in the single digits. Over time, MercadoLibre is likely to expand its footprint and capture a larger share of these emerging markets, which could lead to even greater growth.
One of the most compelling reasons to consider MercadoLibre today is its robust and improving return on invested capital (ROIC). The company’s ROIC has steadily increased, now standing at 18%. This places MercadoLibre in the top 20% of S&P 500 companies, signaling that the company is not just growing, but doing so efficiently. As MercadoLibre continues to expand its high-margin ad business and scale its logistics network, its ROIC should remain strong, fueling long-term profitability.
Even with its stellar performance, MercadoLibre is trading at an attractive valuation. The company’s price-to-sales (P/S) ratio is currently 5.3, less than half of its historical average. The company’s earnings yield of 1.5% is the highest it’s been since 2017, making this an enticing entry point for long-term investors. MercadoLibre’s growth trajectory is impressive, with monthly active buyer growth reaccelerating to 21% in Q3, its highest level since 2020. With fintech revenue and overall company revenue growing by 35% year-over-year, MercadoLibre’s strong fundamentals make it a standout opportunity.
With its solid financial position, market leadership, and significant growth potential, MercadoLibre looks like a once-in-a-decade opportunity. Despite the recent pullback, the stock’s long-term growth story remains intact, making it an attractive buy at current levels.