Shares of Home Depot (NYSE: HD) accept been a abundant abiding investment, and they've soared about 20% so far this year. Investors in the home-improvement alternation accept no acumen to be agitated with that performance.
But there are added stocks that accept performed alike better, and they could abide to beat Home Depot in the advancing years. MercadoLibre (NASDAQ: MELI), Illumina (NASDAQ: ILMN), and Best Buy (NYSE: BBY) are some examples, articular by three of our Foolish investors. Here's what you charge to know.
Image source: Home Depot.
E-commerce baton in a growing bazaar
Danny Vena (MercadoLibre): The Home Depot has provided investors with market-beating allotment over the aftermost decade, abiding over 300%, compared to broader bazaar assets of 60%. During that aforementioned time, however, Latin American e-commerce baton MercadoLibre has alternate over 800%, and the best may be yet to come.
MercadoLibre began as an bargain armpit area buyers and sellers exchanged goods, but the aggregation has acquired into a full-service e-commerce powerhouse, accouterment the belvedere and accoutrement all-important to advice businesses succeed.
The aggregation still offers a chump bargain site, but additionally provides fixed-price appurtenances from abounding of the bigger retailers in Latin America. MercadoLibre helps sellers set up and administer their online store, while accouterment logistics, shipping, and acquittal options in a bazaar area e-commerce is still in its infancy.
In a arena area shoppers don't about accept acclaim cards or alike coffer accounts, MercadoLibre's acquittal solution, MercadoPago, has outgrown its belvedere and is now acclimated by a aggregation of retailers, both on- and offline, while consumers alike use the account to pay account bills.
MercadoLibre has been growing like gangbusters, and as the abridgement improves in Latin America, that advance could accelerate. In its best contempo quarter, acquirement grew to $316 million, up 58% over the prior-year quarter. Registered users added 21%, items awash jumped 63%, and acquittal affairs soared 63%, all year over year.
E-commerce in Latin America represents alone 2.6% of retail sales, compared to 8.4% in the U.S., so there's still affluence of allowance for growth. Ay, caramba!
Success is in this company's DNA
Keith Speights (Illumina): Home Depot and Illumina accept at atomic a few things in common. They're both abundantly acknowledged companies with acceptable stocks. They're both arguably the best at what they do. And they both advertise accessories that accomplish accomplishing things abundant easier than in the past.
Of course, there's a abundant best account of differences amid the two companies. Illumina is a avant-garde of genomic sequencing systems and has been a accurate bold banker in the field. Consider that the antecedent mapping of the animal genome performed by the Animal Genome Project amount $2.7 billion. Illumina's sequencing systems cut the amount to almost $1,000 to map. The company's latest technology, NovaSeq, could eventually lower that amount tag to $100.
As abundant as Home Depot banal has performed through the years, Illumina has done alike better. Over the aftermost 10 years, Illumina banal is up about 690% compared to Home Depot's assets for aloof beneath 350%. So far in 2017, Illumina banal is up over three times added than Home Depot stock.
I anticipate Illumina will abide to be a champ for three primary reasons. First, about two-thirds of the company's absolute acquirement comes from alternating sources. The absoluteness is that Illumina doesn't accept to advertise too abounding new systems to abound its acquirement and earnings. Second, the aggregation will advertise affluence of new systems anyhow -- acknowledgment to astronomic abeyant for NovaSeq. Third, Illumina is advance in analysis and development to break on top. Success is in this company's DNA.
A retail success adventure
Tim Green (Best Buy): Home Depot shareholders accept enjoyed market-beating allotment this year, but Best Buy shareholders accept done alike better. The chump electronics retailer's banal has jumped 32% year to date, beating Home Depot's beneath absorbing returns.
Best Buy has accurate over the accomplished few years that it's able of growing antithesis admitting antagonism from Amazon.com. During the latest quarter, Best Buy's adapted antithesis per allotment surged 21% year over year, apprenticed by a 5.4% acceleration in commensurable sales. A years-long accomplishment to cut accidental costs has fabricated Best Buy nimbler, and a focus on chump account and e-commerce has helped addition sales at a time back abounding retailers are struggling.
Over the abutting three years, Best Buy expects to aftermath slow-but-steady sales advance forth with anniversary EPS advance amid 8% and 9%. That may not complete all that impressive, but this is a brick-and-mortar chump electronics banker we're talking about. Best Buy affairs to drive this advance by accumulative its focus on acute home articles and accretion its portfolio of services.
Retail turnarounds are tricky, but Best Buy has done all the appropriate things over the accomplished bristles years. With the banal trading for about 15 times trailing-12-month earnings, blank a cash-rich antithesis sheet, Best Buy still looks like a appealing acceptable deal.
10 stocks we like bigger than Home Depot
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David and Tom aloof appear what they accept are the 10 best stocks for investors to buy appropriate now... and Home Depot wasn't one of them! That's appropriate -- they anticipate these 10 stocks are alike bigger buys.
*Stock Advisor allotment as of September 5, 2017
Danny Vena owns shares of Amazon and MercadoLibre. Keith Speights has no position in any of the stocks mentioned. Timothy Green owns shares of Best Buy. The Motley Fool owns shares of and recommends Amazon, Illumina, and MercadoLibre. The Motley Fool recommends Home Depot. The Motley Fool has a acknowledgment policy.
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