Here’s the number-1 stock in my ISA and SIPP

I did a fair bit of buying and selling towards the end of 2025 to reposition my Self-Invested Personal Pension (SIPP) and Stocks and Shares ISA portfolios. Consequently, a new stock has become my largest holding after jumping 12% since Monday (5 January).

Here, I’ll explain why I’m happy for it to occupy the top spot as we start 2026.

Large opportunity

The stock in question is MercadoLibre (NASDAQ:MELI). This is Latin America’s largest company by market-cap, though it’s listed in the US on the Nasdaq.

So why Latin America? Well, the region has roughly 650m people. This makes it a larger population than the European Union (about 450m) and almost twice the size of the US (340m).

Meanwhile, the nominal GDP of the region is currently estimated at around $7.3trn. To put that in context, if Latin America was a single country, it would be the worldâs third largest economy behind the US and China.

MercadoLibre operates the region’s leading e-commerce, FinTech, and digital advertisement businesses across 20 countries. E-commerce in Latin America is still in its infancy, with around 12%-15% of shopping done online versus roughly 30% in the UK.Â

Meanwhile, around 70% of Latin America’s population is considered either unbanked or underbanked. As such, financial services there also have an incredibly long runway of growth ahead (likely decades).

The firm’s FinTech platform (Mercado Pago) now has 72m+ users, giving it insights into the spending habits of its customers. This data is a key competitive advantage over rivals.

Finally, the company’s already the regionâs third-largest digital advertising player behind Meta and Google. However, ad revenue as a percentage of the firmâs marketplace gross merchandise value (GMV) is still only about 2% today.Â Amazon‘s is far higher.

As such, management sees a blue-ocean opportunity to become a much larger advertising platform, which bodes well for the company’s long-term profitability (digital ads have very high margins).

Not an overpriced growth stock

Speaking of which, this is another reason why I’m bullish here. MercadoLibre is now firmly profitable, with earnings per share expected to grow at roughly 40% in both 2026 and 2027.

Based on current forecasts, the forward price-to-earnings (P/E) multiple for 2026 is around 36, falling to 26 by next year.

For a tech company that’s grown revenue above 30% for 27 consecutive quarters (and is still optimising for scale rather than profits), I see this as an attractive valuation. I think other growth-oriented investors could consider buying the stock.

Things I’m watching

That said, it would be naÃ¯ve not to acknowledge the risks here. So what am I keeping an eye on? Rising e-commerce competition is one thing, especially from Asia’s Shopee, which has parked its tanks on MercadoLibre’s lawn in Brazil (its largest market).

I still think MercadoLibre will maintain its advantage due to its ts deep regional knowledge and sprawling logistics network, which allows much faster parcel deliveries. But it’s certainly something to watch, as it could lead to a margin-bruising price war.

Also, the firm has a ballooning consumer credit portfolio, which now includes credit cards, so I’ll be monitoring non-performing loan figures moving forward.

Finally, I’m visiting Brazil and Mexico later this year. While I’m there, I’ll test the MercadoLibre user experience and do further research.

The post Here’s the number-1 stock in my ISA and SIPP appeared first on The Motley Fool UK.

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Ben McPoland has positions in MercadoLibre. The Motley Fool UK has recommended Alphabet, Amazon, and MercadoLibre. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.