Best Stocks to Invest in: January 2023

There are thousands of public companies in which you can invest, not to mention the many exchange-traded funds  (ETFs) and mutual funds you can buy, so it’s no surprise that many investors don’t know where to start. And, with the recent market downturn, especially in terms of growth stocks, there are many stocks that are trading at much cheaper prices than they were just six months or a year ago.

But what are the best stocks to buy in 2023? Although I don’t have a crystal ball telling me which stocks will give the best returns, I’ve tried to do the next best thing. In this article, I will discuss 10 stocks that I think could be a great buy in 2023 for long-term investors who want to use their money for work.

Image source: Getty Images.

Before we act, let’s get to know three warnings:

  • Choosing the best stocks to buy today largely depends on your personal financial situation. To get an idea of where you stand, read our guide on how to invest in stocks. It guides you through topics such as setting up  an emergency fund, allocating assets, and when it makes sense to buy stocks.
  • I like this stock as a long-term investment. I have absolutely no idea what they will do in the coming weeks or months. Indeed, if inflation remains high longer than expected or the United States falls into recession, it is very likely that most or all of this may decline in the short term.
  • While I assure some variations, the list below is not meant to be a fully diversified portfolio. Instead, it is my long-term stock with the greatest confidence to invest in 2023 and beyond. The best way to diversify your holdings in one step is to build your core portfolio around something like the Vanguard Total World Stock Index Fund ETF (NYSEMMKT: VT).

Let’s get into my list of the top 10 stocks to buy now and hold for the long term, from  the smallest  to the largest market capitalization, followed by a buy thesis summarized for each.

Top 10 actions for 2023

  1. Etsy (NASDAQ:ETSY), $15 miliar
  2. Pinterest (NYSE:PINS), $16 miliar
  3. Block (NYSE:SQ), $38 billion
  4. Shopify (NYSE: SHOP), $ 38 miliar
  5. Realty (NYSE:O) revenue, $40 billion
  6. MercadoLibre (NASDAQ:MELI), $43 milliar
  7. Intuitive Surgery (NASDAQ: ISRG), $94 billion
  8. Walt Disney (NYSE:DIS), $158 billion
  9. Berkshire Hathaway (NYSE:BRK. A)(NYSE:BRK.B), $687 juta milon
  10. Amazon (NASDAQ: AMZN), $857 billion

(Market capitalization as of January 1, 2023, rounded to the nearest trillion.)

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Elevator pitches para cada stock

Now that you’ve seen my top 10 stocks to buy now, you’re probably wondering why I chose every company. Here is a quick overview of why I like each of them so much as a long-term stock to invest in.

  1. Etsy

Before the COVID-19 pandemic, Etsy grew very well by connecting astute manufacturers with customers looking for something a little more incredible than the cost of a major ecommerce. During the pandemic, e-commerce got a big boost. But Etsy has really skyrocketed, growing more than double the overall e-commerce rate.

It certainly helps that Etsy fits naturally when people want a unique face mask, but its growth is impressive across all product categories. In the second quarter of 2022, Etsy’s market sales volume increased 141% from a comparable level before the pandemic.

As you noticed throughout this list, the powerful platform caught my eye. Make no mistake: Etsy is one of them. Some e-commerce companies go head-to-head with Amazon and survive. Etsy didn’t just survive when Amazon launched its own handmade goods platform; Won. But these could still be the early days of an excellent long-term growth story.

Because of its platform and brand power, Etsy’s market opportunity is hundreds of billions of dollars, and it has just begun to scratch the surface. And, with stocks falling significantly in the recent slump in growth stocks, now might be a good time for patient long-term investors to take a closer look.

  1. Pinterest

Pinterest is an oasis of positivity in  an increasingly depressing and divisive social media landscape. It partially flows into what Pinterest is all about, which is an idea.

People go to Pinterest to focus on things, not others. Whether it’s building a dream deck, baking children’s birthday cakes, or updating their wardrobe, Pinterest gives people visual inspiration for the things they want to do.

Pinterest has been hit hard in the 2022 market crash, especially as its user base shrinks slightly as pandemic restrictions are lifted around the world. However, based on the company’s latest results, it seems that the user base has stabilized for the time being. What’s more, Pinterest only has a fraction of Facebook’s user base, so there’s still a lot of potential for long-term user growth.

What’s most interesting from a long-term investor perspective is that Pinterest has a huge opportunity when it comes to monetizing its users, especially as the company moves away from the traditional, ad-centric model and tries to find ways to incorporate ecommerce into its platform.

Pivot certainly makes sense. Pinterest is a place where people look for things they might want to buy, and recently hired ecommerce veteran Bill Ready as its new CEO to help speed up its turnaround. It may take a while for a company to truly realize its ecommerce potential, but long-term investors can be rewarded generously.

It’s easy to imagine what a seamless ad, lead generation, and product placement would look like when people were already there for suggestions. The monetization potential is huge internationally, accounting for 80% of its user base, but only a fraction of its revenue.

  1. Block

Block, formerly known as Square, has evolved from a dedicated payment processing hardware company to a massive financial ecosystem for merchants and individuals. On the business side, Block processed about $188 billion in payment volume over the past four quarters, and also offers a suite of adjacent services for businesses.

On the individual side, Block has a Cash app, with 47 million users, as well as capabilities including person-to-person money transfers, direct deposits and debit cards, the ability to buy and sell stocks and Bitcoin (CRYPTO: BTC), and more.

Block also recently acquired music app Tidal, in addition to the buy-now, pay-later afterpay platform. As your ecosystem grows, businesses should only become stronger. The long-term trend of adopting cashless payments still has a long way to go, and with many potential growth verticals I can pursue, Block is earning a spot in my top 10 stocks to buy now.

  1. Shoplifting

Shopify operates a platform designed to allow businesses of all sizes to sell their products online, with a particular focus on empowering small businesses and growing with them by building long-term relationships. Shopify offers subscription plans starting at $29 per month for businesses, and also offers many adjacent services that help businesses operate smoothly, such as payment processing and logistics solutions.

Shopify’s “one-stop-shop” approach to enabling ecommerce has made it a powerhouse. It now has more ecommerce sales flowing through its ecosystem than any other company besides Amazon. However, Shopify may just be getting started. The platform has generated over $5 billion in revenue over the past four quarters, but this is only a fraction of its estimated market opportunity of $153 billion (and counting) as more retailers shift their focus to online sales.

E-commerce is still in a relatively early stage, accounting for less than 15% of retail sales in the United States. And Shopify has the number two share, giving it a huge edge over many of the world’s largest retailers. With stocks falling sharply in the recent market downturn due to recession fears and signs of slowing consumer spending, Shopify seems like the obvious choice for the best stocks to buy in 2023.

  1. Real estate income

There is a strong case for making that in terms of value, growth, and earnings, it is difficult to find a more complete stock for long-term investors than Realty Income.

In case you’re unfamiliar, Realty Income is a real estate investment  trust, or REIT, and invests primarily in single-tenant independent retail properties.   Walgreens (NASDAQ: WBA), Dollar General (NYSE: DG) and FedEx  (NYSE: FDX) are just a few examples of major tenants. Realty Income owns more than 11,000 properties in the United States and Europe, most of which are recession-proof and less vulnerable to e-commerce disruptions than many other retail companies. In addition, Realty Income’s triple-net leasing structure helps create a stable and predictable revenue stream.

The proof is in performance. Since being listed on the New York Stock Exchange in 1994, Realty Income has generated a total annual return of 15.1%, easily outperforming the S&P 500. It has paid more than 600 monthly dividends in a row (the current annual yield is about 5%) and has increased its payments 116 times, with no dividend cuts along the way.

  1. MercadoLibre

One of my favorite long-term stock investments in the market, MercadoLibre is often referred to as Amazon Latin America, and for good reason. The company operates an e-commerce marketplace  that has a dominant presence in some of the region’s most populous countries, including Brazil and Argentina.

However, there is much more to MercadoLibre. It operates a rapidly growing payment platform called Mercado Pago, a logistics service known as Mercado Envios, a business lending platform, and more. The market recorded merchandise volumes of $8.6 billion in the second quarter of 2022, and Mercado Pago processed more than $120 billion in annual volume, with about two-thirds coming from outside the company’s e-commerce platform. Both of them are thriving. And don’t ignore the Credit Market, the company’s young but thriving lending business. Mercado Crédito has more than tripled in size in the last year alone, and has $2.7 billion in unpaid loan balances.

The best part is that all these businesses are in a relatively early stage. MercadoLibre’s merchandise volume is about 6% of Amazon’s, and its Mercado Pago payment volume is less than 10% of what PayPal process  (NASDAQ: PYPL).  So, there are a lot of tracks ahead.

MercadoLibre is not only Amazon Latin America, but also Amazon, PayPal, Square, Shopify and others, all rolled into one, and it is in a much earlier stage of growth. As the e-commerce and fintech landscape in Latin America evolves in the coming years, MercadoLibre could be a major long-term beneficiary.

  1. Intuitive surgery

Robot-assisted surgery overcomes shaky human hands. That general thesis hasn’t changed much since I first noticed the Intuitive Surgical stock in 2005. The da Vinci Surgical System is the clear market leader, and the “razor and knife” model helps it generate recurring revenue streams because its systems are used to perform procedures.

Intuitive Surgery is dominant in its space, and it has a lot of room to grow as its surgical system increases in adoption and the number of compatible procedures increases over time. This is especially true in many international markets, where the implementation of robot-assisted operations can be a catalyst for long-tail growth for this excellent business in the coming decades.

  1. Disney

House of Mouse is an all-weather tire of the wallet. The pandemic hurt its theme park and movie business, but helped the Disney+ streaming service, which had been a powerhouse years earlier than Disney expected. In fact, Disney+ now has more than 150 million subscribers less than three years after launch, while  the company’s initial five-year target  requires between 60 million and 90 million.

In 2022, demand for Disney theme parks and movies will return stronger than ever. In fact, revenue is now higher than the comparable  time  before the pandemic at Disney parks due to initiatives that have driven higher spending per guest. On the streaming side, Disney+ has been a huge success, and the company is really focused on expanding it and the company’s other streaming platforms, Hulu and ESPN+.

Disney could even be the ultimate combination of reopening jobs and pandemic-driven growth businesses. The stability of its outstanding intellectual property (Marvel Cinematic Universe/Star Wars/ESPN/Pixar/Disney) and ATM theme park business gives it a margin of security that makes it perhaps the safest stock on this list. And you still have tremendous growth potential as newer areas of your business evolve.

  1. Berkshire Hathaway

While most of this list consists of growth stocks, it is a relatively boring  choice of group values  . Berkshire Hathaway has a collection of about 60 subsidiaries, including household names such as GEICO, Duracell and Dairy Queen, just to name a few. Berkshire also has a portfolio of more than $340 billion worth of common stock that includes large shares in Apple (NASDAQ: AAPL),  Bank of America (NYSE: BAC), Chevron (NYSE: CVX), American Express (NYSE: AXP) and Coca-Cola   (NYSE:  KO  ),  as  well as positions in dozens of other companies, many of which were personally selected by legendary investor Warren Buffett  , which at the age of 92 still manages most of Berkshire’s investments.

Buffett’s bears will say he lost his fastball, but Berkshire continued to generate above-market returns for most of the year despite its enormous size. And while Berkshire certainly won’t generate the 3,600,000% return (not a typo) it has generated since Buffett took the helm, there’s no reason to believe that it won’t continue to outperform the S&P 500 for the foreseeable future. If Berkshire were a mutual fund, it would be the largest actively managed mutual fund in the world.

Buffett won’t lead forever. But Berkshire is her legacy, and he has protected her from stress for years to make sure she’s in good shape long after she’s no longer running things. Showing their faith, he and his partner Charlie Munger have been buying back shares regularly. That bodes well for long-term patient investors like us.

  1. Amazon

Amazon really doesn’t need a lot of elevator pitches for most people. The company has a dominant advantage in the U.S. e-commerce market with about $600 billion in gross merchandise sales last year, and  its Amazon Web Services cloud platform is also the market leader.

However, there is more potential for growth than you think. We are still far from maximizing e-commerce adoption; it still accounts for less than 15% of all U.S. retail sales. The cloud industry is also relatively young. Amazon also has a lot of potential in other areas such as healthcare, grocery stores,  neighborhood marketplaces, and more.

 

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