2 Unstoppable Stocks That Could Double Your Money in 5 Years

Market Overview - The market indexes continued to soar in 2024, but value stocks may become more attractive in 2025 as growth stocks' earnings multiples appear frothy [1] Alibaba (BABA) - Alibaba is trading at a bargain price, with analysts expecting long-term earnings growth of 15% per year and the stock trading at less than 10 times 2025 earnings estimates [2] - Earnings growth alone could double the share price in five years, with potential for further upside from an expansion in the price-to-earnings multiple [3] - Alibaba's low valuation is attributed to China's economic struggles and emerging competition from PDD Holdings [4] - Alibaba's commerce revenue grew 1% year-over-year in the September-ending quarter, while monthly active consumers on Taobao and Tmall reached a new all-time high [5] - Alibaba Cloud revenue accelerated to 7% year-over-year last quarter, with AI-related product revenue growing at triple-digit rates over the last five quarters [6] - Adjusted net income declined 9% year-over-year, but management is focused on improving efficiency and downsizing non-core assets, such as the $1.5 billion sale of its equity interest in Sun Art [7] - Alibaba returned $4.1 billion in dividends and $4.3 billion in share repurchases in Q3, indicating management sees solid value in the shares [8] MercadoLibre (MELI) - MercadoLibre is the dominant e-commerce company in Latin America, offering services like mobile payments, shipping, credit, and an online marketplace [9] - Revenue continues to grow at high rates, with Wall Street consensus expecting annualized earnings growth of 30% per year, supporting a stock trading at 39 times expected earnings [10] - The stock's recent price-to-sales multiple of 4.9 is less than half its 10-year average of 10.7 [10] - Unique buyers on Mercado's marketplace platform grew 21% year-over-year last quarter to over 60 million, with potential for further growth given Latin America's population of 650 million [11] - Net income increased 11% year-over-year last quarter, with margins trending upward as management invests in technology to improve the user experience [12] - Margins are expected to continue improving as the company expands fulfillment centers, driving incremental revenue, growing scale, and lowering delivery costs [13] - Advertising revenue grew 37% year-over-year, providing another profitable revenue stream to boost margins over the long term [13] - Given its leading position in a growing e-commerce market, investors have a good chance of doubling their money with MercadoLibre stock over the next five years [14]