Stocks that are cheap again: As long as they are not always cheap or just falling, the investment thesis may be intact. It is crucial that there is a company-oriented potential. And also that the growth story and the market tend to remain intact.
Zalando (WKN: ZAL111) and Mercadolibre (NASDAQ:AMD) are two stocks that are cheap right now for me. Let’s look at the details and the basic starting point. This could possibly be an interesting opportunity to buy more.
Zalando: Share that’s cheap again
The first stock that is now cheap again is Zalandos. The share price recently fell from over EUR 30 to EUR 23.11. This means that stocks are more likely to return to their 52-week low than in the direction of a reversal. But it is not uninteresting.
Zalando operates in a market that we can clearly classify as online retail. Only in the fashion segment where economic fluctuations can occur, especially in times of inflation. Clothing is not the clear growth market when consumers are more tight-lipped about their cash. But: The trend should continue to be that consumers shop more online. Maybe also to buy something more price conscious.
Zalando is a cheap share, but not only in relation to the share price. With a market value of EUR 6.1 billion. the price to sales ratio is currently below 0.6 again. The price-earnings ratio based on 2021 doesn’t even break 30. Of course, there are now declining numbers in a weaker consumer market. But the management expects sales of at least 20 billion euros in 2025. Growth is therefore in the air in the medium term.
Mercadolibre: Further away from 1,000 euros!
Mercadolibre shares have also moved away from 1,000 euros. We could also say: It’s cheap again. The share certificates are currently traded at around 850 euros. However: For me this is more of a cheap option to buy one later.
Mercadolibre’s management has recently made progress on many fronts. For example, the net result, which was very positive with 123 million US dollars in just one quarter. As well as continued high double-digit sales growth in the last quarter. Most recently, management has pursued new initiatives related to blockchain and cryptocurrencies. Using your own digital currency, you want to start a loyalty program in the future. I see the potential in binding your own buyers and users closer.
We can also see from classic ratios that the Mercadolibre share is now once again one of the cheap shares. A market capitalization of 43 billion dollars means that the ratio of price to sales is about 4. For the leading Latin American ecosystem with megatrends such as digital payment services, e-commerce, cryptocurrencies and other, smaller directions, I say: the price is worth it.
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Vincent owns shares in Mercadolibre and Zalando. The Motley Fool owns shares in and recommends MercadoLibre and Zalando.