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Outrageous. Overvalued. Unexplainable. Bubble. These are the descriptions I hear about a newly minted e-commerce IPO, MercadoLibre (MELI - commentary - Cramer's Take). I give it a different label: Buy.
Without a doubt, the stock is expensive, and I expect it to stay that way. Top-performing growth stocks will always be expensive -- eBay and Amazon were richly valued the whole way up. According to Think Equity, if you took the returns of the top 25 growth stocks since 1996, the average price-to-earnings ratio would be 45.8. In other words, very expensive. I believe this e-commerce platform is the best way to play Internet trends in Latin America. Imagine being able to travel back in time and invest in eBay and Amazon in their early years of hyper-growth. Would you take that opportunity? Well, it is staring you right in the face with MercadoLibre. Here are the key investment points:
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Patrick Schultz is a research associate at TheStreet.com. In keeping with TSC's editorial policy, he doesn't own or short individual stocks. He also doesn't invest in hedge funds or other private investment partnerships. He has previously obtained Securities licenses under the NASD?s Series 7, Series 24, Series 52, and Series 63 exams and has worked in the financial markets on various trading desks in addition to trading for his own account. Schultz appreciates your feedback; click here to send him an email. Brokerage Partners
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