Watch These Amazon Competitors Ahead of Black Friday, and After It

Black Friday may be weeks away, but the annual shopping extravaganza is already generating unprecedented excitement online.

E-commerce giant Amazon.com has kicked off sales for the annual shopping festival while Sam's Club, which is owned by Walmart, has attractive deals for Black Friday that have already begun to surface online. This comes as more retail transactions shift online. An Adobe report suggests that e-commerce sales will increase 11% this year to $91.6 billion.

MercadoLibre  (MELI) and eBay (EBAY) are two retail stocks that are likely to reward investors as Black Friday approaches -- and even beyond. They have performed well, and demand for their services has grown steadily. Shares of both companies fell during Wednesday's session. 

These dark horses are positioned for outsized growth in the coming weeks.

Much like what Baidu has done in China, MercadoLibre applied a proven online business model and built a leading regional franchise, in this case, in Latin America.D

1. MercadoLibre

Think of MercadoLibre as the eBay of Latin America with a strong following even in the U.S. The company's remarkable recent financial performance proves this international growth stock is an attractive investment option for investors.

Like Amazon.com and Alibaba, MercadoLibre has continued to establish its ancillary payments and shipping services. This gives it a strong competitive advantage. MercadoLibre's equivalent to PayPal, MercadoPago, has seen huge growth in number of transactions.

MercadoLibre shares, which are 45% year to date, have been buoyed by solid earnings-revision activity, too. The up-to-date consensus among 14 polled investment analysts is to buy stock in MercadoLibre. The company is trading at an attractive five-year expected price/earnings-to-growth ratio of 2.17. That's better than Amazon (3.71) and Alibaba.

2. eBay

Another great investment idea is eBay. The online marketplace plans to sell up to 5.5 million shares of its stake in MercadoLibre, a sale that could net nearly a billion dollars. This money could be used to buy back shares of eBay, which has been down from the beginning of the year.

Online innovator eBay could be one of the big gainers in the holiday season because of its inherent ability to offer bargains on some items and the variety of merchandise it handles.We believe that eBay remains one of the strongest ways to profit from online shopping. With the stock price dropping by nearly 13% over the last month, this is a good buying opportunity considering eBay's solid free cash flow and strong capital returns.

As of now, there is little risk associated with buying this proven e-commerce leader. Wall Street's obsession with guidance caused many to miss the strong quarterly show put up by eBay. Both eBay's top and bottom lines were better than analysts' expectations. The net-debt free company's other big growth cylinder is StubHub, which provides a lot of room to add new sales, although margins are lower than eBay's core marketplaces platform.

eBay is a solid stock pick ahead of Black Friday, and potentially beyond. 

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This article is commentary by an independent contributor. At the time of publication, the author held no positions in the stocks mentioned.

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