The biggest regrets often involve roads not taken. That's true for life, in general, but it's especially applicable to investing. Many investors kick themselves later for not buying the stocks of great companies with tremendous growth prospects earlier.
Not every stock offers a realistic chance to achieve huge gains. But if you have $3,000, buying these three stocks just might be the smartest move that you'll ever make -- at least from an investing standpoint.
Image source: Getty Images.
1. MercadoLibre
It's easy to focus exclusively on U.S. stocks. However, some of the biggest opportunities are with international stocks that target emerging markets. MercadoLibre (MELI) stands out as one of the best in the category.
If you're not familiar with MercadoLibre, picture a combination of Amazon.com, eBay, and PayPal with a Latin American twist. MercadoLibre's e-commerce marketplace is akin to Amazon and eBay. Its Mercado Pago digital payment platform is similar in some respects to PayPal. And MercadoLibre focuses exclusively on the Latin American market.
Investment firm Morgan Stanley projects that the e-commerce market penetration rate in Latin America will jump from 9% last year to 16% in 2025. As the biggest player in the market, MercadoLibre stands to benefit the most from this growth. The company's digital payment revenue should expand in tandem with its e-commerce business.
We're talking about a potential market of at least $160 billion within three years. MercadoLibre's market cap is only around $50 billion. With its shares down almost 50% since September 2021, this stock looks like a great pick to buy at a discount.
2. Teladoc Health
Here are two numbers you need to know: $2.6 billion and $261 billion. The former is the amount of revenue that Teladoc Health (TDOC -0.36%) expects to generate this year. The latter is Teladoc's total addressable market -- in the U.S. alone.
Can Teladoc grab a significant chunk of its addressable market? I think so. The company already ranks as the leader in virtual care. Teladoc offers the broadest array of services in the industry. Its client base tops 12,000 with 76 million members.
The easiest path to growth for Teladoc is expanding its reach within its existing client base. Teladoc estimates this opportunity is around $75 billion. New products and services such as Primary360 virtual primary care could enable Teladoc to continue winning additional clients as well.
Many investors seem to have written off Teladoc. The stock has plunged 75% from its high set in early 2021. But with its market cap now below $12 billion and an enormous potential market, Teladoc appears to be a surefire winner over the long run.
3. Vertex Pharmaceuticals
Vertex Pharmaceuticals (VRTX 0.42%) reigns as the king of the cystic fibrosis (CF) market. There are four approved therapies that treat the underlying cause of the genetic disease -- and Vertex owns all of them. The good news is that Vertex has only tapped a little over half of the CF market so far. Its closest rival is only in phase 2 testing.
The big biotech plans to expand beyond CF as well. Vertex and partner CRISPR Therapeutics expect to file for regulatory approvals of CTX001 in treating sickle cell disease and beta-thalassemia later this year. The gene-editing therapy could have a multibillion-dollar opportunity.
That's just the tip of the iceberg, though. Vertex is advancing VX-147 into late-stage testing within a matter of weeks in treating APOL1-mediated kidney diseases, which has a bigger patient population than CF.
Then there's the huge wild card with the company's type 1 diabetes candidates. Vertex CEO Reshma Kewalramani said in the company's fourth-quarter conference call, "Our goal with our type 1 diabetes program is to develop a functional cure for this disease, including for the more than 2.5 million people living with type 1 diabetes in the U.S."
Unlike MercadoLibre and Teladoc, Vertex is performing well right now with shares up more than 10% year to date. The stock is still cheap based on one key valuation metric, though, with a price-to-earnings-to-growth (PEG) ratio of only 0.35. I think Vertex could be a monster winner over the next decade and beyond.
