Got $5,000? 2 Stocks to Buy Now While They're On Sale

While some believe equity markets are currently overvalued, there are plenty of deals to be had for investors willing to look hard enough. Consider MercadoLibre (NASDAQ: MELI) and Uber Technologies (NYSE: UBER), two leaders in their respective fields. Although they have faced some challenges of late, both stocks look like attractive long-term options, especially at current levels. Here's why, for those with $5,000 to spare (that isn't put away for a rainy day), investing in either -- or both -- of these stocks would be a great move.

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1. MercadoLibre

MercadoLibre is increasingly facing stiff competition in the e-commerce market in Latin America, where it has long dominated. The company's latest quarterly update wasn't strong either. The fintech giant's bottom line declined on a year over year basis, coming in short of analyst estimates. Despite these problems, there are good reasons to invest in MercadoLibre. The first is valuation. MercadoLibre is trading at 30.8x forward earnings, which is about as low as its forward P/E (price-to-earnings) has been in two years.

MELI PE Ratio (Forward) data by YCharts

At current levels, MercadoLibre could be a steal provided it can bounce back. And there are good reasons to think it can. The company's lower-than-expected net income in the fourth quarter was partly due to investments into the business that should pay off down the road. For instance, MercadoLibre has been doubling down on extending free shipping on more items (by lowering the minimum transaction amount), a strategy that has paid rich dividends in the past.

This strategy hurts margins and profits in the short term, but it could help attract more customers to its platform -- or increase items sold even with the same number of consumers -- leading to higher gross merchandise volume and revenue over time. MercadoLibre is also expanding its credit business, issuing more credit cards and loans. Again, this can shrink net margins in the short term, notably through higher bad-debt provisions. However, it may well be worth it given the opportunity.

As MercadoLibre argues, the region it serves is severely underbanked: in Mexico, less than 20% of people have credit cards, while that number is at 40% in Argentina. The company is looking to fill that gap and establish itself as a financial giant in the process, and it is already well on its way. MercadoLibre may not have performed well over the past 12 months, but the company remains well-positioned to ride the e-commerce and fintech tailwinds in Latin America for years -- possibly decades.

Investing in the stock at current levels could lead to superior returns down the road. Shares are changing hands for $1,736, so $5,000 gets you two with $1,528 to spare.

2. Uber Technologies

Uber Technologies, the ride-hailing specialist, also looks about as cheap as it has in a while.

UBER PE Ratio (Forward) data by YCharts

The company's shares haven't performed well over the past six months, as both its third and fourth-quarter updates were somewhat disappointing, with earnings misses and lower-than-expected guidance. However, Uber has plenty of redeeming qualities, at least for investors willing to stick with the company long-term. Let's consider three things that make Uber's prospects attractive.

First, it still has plenty of room to grow in its core markets. Uber is one of the leaders in its niche and has developed a strong economic moat due to network effects: The more customers on its platform, the more it attracts rideshare drivers, and vice versa. And while ride-hailing seems ubiquitous, only about 10% of adults use these services monthly in Uber's top 10 markets.

That means there is a massive remaining worldwide opportunity to bring more people into its ecosystem.

Second, Uber's financial results remain strong. In the fourth quarter, the company's revenue increased 20% year over year to $14.4 billion, while its adjusted earnings per share rose 27% to $0.71. The company ended the quarter with $2.8 billion in free cash flow, up 65% year over year. Lastly, Uber is positioning itself to overcome potential long-term challenges and turn them into opportunities instead.

While some believe that the rise of self-driving vehicles will be a blow to the business, Uber has partnered with leading autonomous vehicle companies to use its platform and vast ecosystem to match riders with cars on its app. It is now doing the same with Joby Aviation, a company developing air taxis.

It will be a while before either self-driving cars or air taxis fully take over, but once (if) they do, Uber will likely be ready to cash in. So, the future is bright for the company, and after the beatdown the stock has received in recent months, its shares look attractive. Uber's shares are worth about $75 right now, so investors can get 20 of them with the $1,528 left over from that initial $5,000.

Prosper Junior Bakiny has positions in MercadoLibre. The Motley Fool has positions in and recommends MercadoLibre and Uber Technologies. The Motley Fool has a disclosure policy.