Latin American e-commerce and fintech juggernaut MercadoLibre has already become a 65-bagger for investors since its initial public offering in 2007, including a 1,220% appreciation in value over the last 10 years. Despite these incredible returns, the best could still be ahead for the company — management estimates that Latin American e-commerce lags the U.S. market by roughly 10 years.

Over this decade, even with the U.S. market being more mature, Amazon has grown its sales sevenfold, highlighting the growth runway that could still be ahead of MercadoLibre. Growing unique buyers, active fintech users, and revenue by 21%, 35%, and 35%, respectively, in Q3, MercadoLibre continues to prove that it is on its way to becoming the Amazon of Latin America.

Operating margin and net income margin declined during the quarter, however, prompting the company’s 13% pullback in share price recently. But, with capital expenditures (capex) rising 77% compared to Q3 2023, this declining profitability isn’t an indictment on MercadoLibre stock, in my opinion. Instead, it shows that management is happy to trade short-term profits for long-term cash flows by reinvesting in its operations.

Investing in its logistics network to serve the underpenetrated LatAm e-commerce market while building out its credit portfolio to help the underbanked, the company’s focus on benefiting its users is more important to me than 90 days’ worth of profits. MercadoLibre’s return on invested capital (ROIC) continues to climb — which has historically proven to lead to a stock’s outperformance — leaving me confident that its capex will pay dividends further down the road.

MercadoLibre currently trades at 5 times sales — half its average valuation across the last decade — making the recent dip a perfect opportunity to add to this multibagger.

Five years ago, Wingstop shares traded for about $60 per share, with a price-to-earnings (P/E) ratio of over 100. Its stock has since quintupled, while its P/E ratio has shrunk slightly to 90.

The reason I point this out is that it is very easy to ignore investing in Wingstop today because it appears egregiously expensive. That said, the company is quickly proving to be a shining example of believing in the notion that buying a premium business at a fair price is better than buying an average company at a cheap price.

Wingstop is the largest chicken wings-focused fast-casual chain in the world and is now home to nearly 2,500 stores. That has reflected in its stock price, which has appreciated 965% over the last 10 years. However, the restaurant chain has ambitions to grow to more than 4,000 locations in the U.S. alone, as well as an additional 3,000 more internationally.

And it is firing on all cylinders to get to this goal.

Wingstop added 106 new stores in Q3, growing its store count by 17% compared to last year. But this was only a portion of the company’s staggering growth. Increasing same-store sales by 21%, Wingstop delivered sales growth of 39% overall.

However, because earnings per share only grew by 32% during the quarter and missed analysts’ expectations, Wingstop’s share price plummeted 26% from its 52-week highs. Ultimately, I believe this pullback gives investors an opportunity to pick up shares of one of the best compounders on the market today at a discount.

Wingstop is home to a high and rising ROIC of 38%, demonstrating its ability to continue growing through its franchise model in an immensely profitable manner. Best yet, with 90% of its new locations opened by existing franchisees, the odds of a new location’s success are pretty high, considering their familiarity.

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John Mackey, former CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. Josh Kohn-Lindquist has positions in Celsius, Costco Wholesale, and MercadoLibre. The Motley Fool has positions in and recommends Amazon, Celsius, Costco Wholesale, MercadoLibre, and Monster Beverage. The Motley Fool recommends Wingstop. The Motley Fool has a disclosure policy.

3 Unstoppable Multibaggers Up Between 965% and 3,450% Since 2014 to Buy After a Recent Pullback was originally published by The Motley Fool