MercadoLibre (MELI 1.09%) is an e-commerce pioneer yet it still has ample opportunity to expand. In this clip from "The Rank" on Motley Fool Live, recorded on May 2, Motley Fool contributor Danny Vena explains why MercadoLibre is one of his highest conviction stocks.


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Danny Vena: Let me start by saying that this is a stock that my investing thesis from a decade ago really has not changed. And in fact, recent developments, things that MercadoLibre has done over the past several years has really increased my conviction of the stock. So let's just start with some of the basics here. MercadoLibre, as you know, people who have followed this for a while know, it's the largest e-commerce and digital payments platform in Latin America. There are a couple other things for me that most other investors miss out on. First of all, this is an area where roughly about half of the people that live in a region that's twice the size of the United States -- half the people don't have a credit card, don't have a checking account. So that means that they still pay in cash. Because of the boom in mobile phones that has happened over the past several years, there are a lot more people that are adopting digital payments. You know, you can go to a convenience store, you show them a QR code on your phone, you hand them some cash, and money goes into your account, just like that. So for people that don't have a bank account, don't have a credit card, that's an easy way to do things. Now, MercadoLibre's payments, MercadoPago, started as a way for you to make payments so that you could buy e-commerce on their website. It expanded very quickly to people who were able to pay things like their utility bills or other things like cellphone bills. 

Jason Hall: It's bigger off MercadoLibre than on MercadoLibre, right, Danny? 

Vena: Oh absolutely. I mean, the payments right now, the payments business is growing faster off-platform than on-platform and is a much larger opportunity. In fact, it's become so popular, all of the big e-commerce sites wanted to use MercadoPago on their websites, and then brick-and-mortar stores started adopting it. Still, e-commerce is still in the high single digits or low double digits, depending on what country you're in in Latin America. So there's still a lot more opportunity to expand in e-commerce. There's still a lot more opportunity to expand in digital payments. And this is not a company that all of a sudden went from triple-digit growth to single-digit growth or low double-digit growth. Most recent quarter, revenue was still up 74% year over year. So they're still firing on all cylinders. I know that's an overused cliche, but it's true. So I think that MercadoLibre is still, like it has always been, the opportunity to get in on an area of the world that is still largely cash-based, that is rapidly turning to digital payments, that is still in the low single digits or high single digits adoption in terms of e-commerce. It's got twice the population of the United States and secular tailwinds for everything that we've just talked about. So this is why MercadoLibre is one of my largest positions and probably one of my highest conviction stock among the 60 plus that I own in my portfolio.