Blending some US growth stocks into my ISA portfolio has made a massive difference to my wealth over the years. While it certainly introduced more volatility, the subsequent gains made it worthwhile, in my mind. And even though the UK has its fair share of growth-oriented enterprises, the amount of choice across the pond is significantly greater.
Volatility is obviously still plaguing the stock market. But with inflation cooling and interest rates on the verge of becoming stable, now might be the perfect time to do some shopping. And two companies I’ve had my eye on for a while are CrowdStrike (NASDAQ:CRWD) and MercadoLibre (NASDAQ:MELI).
Cybersecurity at its finest?
It’s no secret that cybersecurity is becoming an evermore critical component of running a business successfully. There’s an increasing number of bad actors, which makes CrowdStrike’s Falcon platform an alluring proposition.
It’s a cloud-based system that, like any other cyber defence solution, prevents unauthorised access to firm data. But what makes it special is the way the platform handles new threats. With trillions of data points moving through it each day, every time Falcon encounters and stops a new threat, this knowledge is made available to all customer deployments, providing instant protection to everyone if the same threat emerges again.
The software is certainly resonating well with customers. The company only controls a small portion of the global market share. But the subscription and modular add-on approach to billing is generating absurd amounts of free cash flow with underlying margins sitting in double-digit territory.
Now, that may change quickly if Falcon no longer performs. Failure to detect or prevent breaches could easily encourage customers to swap to an alternative solution. Meanwhile, securing new business will undoubtedly become exceptionally more challenging.
So far, the firm has a rock-solid track record of stopping hackers in their tracks. And with management aiming to hit $10bn in sales by 2030 versus the $2.2bn achieved in its 2023 fiscal year (ending in January), the firm looks like an explosive growth opportunity for my portfolio.
Investing in Latin America
MercadoLibre has its fingers in many pies. While it’s often referred to as the Amazon of South America, it does so much more than just e-commerce. The firm offers a payment processing platform, provides logistical solutions, hosts individual online storefronts, and runs online advertising, among countless other services.
In 2022, $34.4bn of gross merchandise volume moved through its marketplace. And it’s currently on track to surpass this by the end of 2023. Meanwhile, despite the fintech side of the business being relatively new, it’s already contributing nearly half of the topline.
While profit margins have been a bit wobbly over the last decade, they’re starting to climb again. And with its latest plans to expand into Mexico, the growth story appears to be far from over.
Of course, Latin America isn’t the most economically stable region and many countries in which MercadoLibre operates have suffered rocketing inflation. For instance, inflation in Venezuela as of September stands at 318%!
Needless to say, economic instability doesn’t create ideal operating conditions and could hamper the firm’s growth potential. But with a long history of navigating these markets, I remain cautiously optimistic about the group’s long-term prospects. That’s why I’ve just snapped up some shares.
