Does MercadoLibre (MELI 5.34%) have a more sustainable competitive advantage than its competitors? In this clip from "Ask Us Anything" on Motley Fool Live, recorded on May 4, Motley Fool contributor Jon Quast discusses why he added MercadoLibre to his portfolio and believes in the growth of Latin America's digital economy.
Jon Quast: MercadoLibre is actually the most recent of these five that I have purchased. I bought this on March 11, and I got it for $898 a share. I'm pretty happy with that right now. Obviously, it's above that. This is the first time I've ever bought MercadoLibre. It's always been in probably my top 3-5 stocks to buy, but never quite making that No. 1 spot and, in March, I just said, you know what, how is it that I still have never bought the stock? I'm finally going to just buy this year. The reason I get a little bit more aggressive, now I don't believe in market timing, I already said that I do get a little bit more aggressive when the market is down. So this was an opportunity for me to use the cash I had on the sidelines and buy a position in the company I believe in. You can see here my paragraph thesis when it comes to MercadoLibre. In essence, I believe in the growth of the digital economy in Latin America, whether that is in digital payments or e-commerce. I think that MercadoLibre is enabling both of those mega trends. I believe its moat is real, when you look at its logistics network and also the amount of payment volume that it's processing off its platform. It's becoming this wider tool that's much broader than just for its e-commerce portal. Its marketplace, in my opinion, maybe isn't the thesis here. Maybe the MercadoLibre marketplace doesn't actually become the go-to marketplace in Latin America but the logistics network that it has and the payments network that it has, does seem to have this expansion happening and I believe that there's a real moat. When I look at the other players in these markets, I'm not as convinced with their sustainable competitive advantage as I am with MercadoLibre, and so that's why I was much more comfortable taking a large position in MercadoLibre.
