1 Fintech Company Dominating in Latin America

MercadoLibre (MELI 0.58%) has expanded from not only an e-commerce leader in Latin America to a major fintech player. In this clip from "The Rank" on Motley Fool Live, recorded on June 13, Motley Fool contributor Jason Hall explains why the e-commerce giant is one of his highest conviction stocks.

Jason Hall: It's also become a major player in fintech. We know about Mercado Pago, its payments platform, which has become the de facto digital cash for millions of people in Latin America that are using it more off of MercadoLibre than they are actually using it on MercadoLibre. That talks about how important it has become as the way to do things like pay your mobile phone bill, pay utilities, buy things off of the platform plus buying things from MercadoLibre and from MercadoLibre's retail partners on its website. It's also become a lender. It has two decades worth of data about successful businesses and enterprises. It's become a lender to a lot of its growing number of its merchants to help them establish their consumer lending. This is a business lending that it's built. I saw an interview with MercadoLibre's founder, Marcos Galperin, a couple of years ago. It's in the middle of the pandemic. He did an interview with PayPal's (PYPL 0.59%) CEO, actually, which was really interesting. He said MercadoLibre's mission over the next 20 years is to make Latin America a cashless society. That talks about ambitions right there. I wanted to show, I promise, there's free cash flow numbers. Let me show that real quick. While I'm bringing that up, who wants to chime in here?

Travis Hoium: This is the one that I recently added. I've never owned MercadoLibre but Jon Quast used to live in that region of the world and just talked about how dominant they are in Latin America from an e-commerce perspective. I think that's one of the things that's hard evaluating that company. We talked about a lot of these things but getting that perspective on the ground, what it really looks like, it's like, I can test an app but it's hard to order things from MercadoLibre. I've taken a lot from those conversations still.

Hall: This goes back as far as we can go to when the company went public. It has generated positive operating cash flow since it went public. Free cash flow dip negative a little bit last year because again, positive operating cash flow. This is a company that is spending a tremendous amount of money to build on its lead and establish itself even more fully. This is one of my two or three highest conviction companies.