There are literally thousands of publicly traded companies you can invest in, not to mention the countless exchange-traded funds (ETFs) and mutual funds you can buy. Therefore, it is not surprising that many investors do not know where to start. And although the market is well above its recent recession lows, many stocks are trading at significantly lower prices than they did a year or two ago.
But what are the best stocks to buy in 2023? Although I don’t have a crystal ball to tell me which stock will deliver the best returns, I have tried to make the next best choice. In this article, I will look at 10 stocks that I think could be good buys in 2023 for long-term investors who want to put their money to work.
Why these 10 Stock For Short Term Investment?
Choosing the best stocks to buy today depends on your personal financial situation. Read our guide on how to invest in shares to find out where you stand. It guides you on topics like building an emergency fund, asset allocation, and choosing the right stocks for you.
I like these stocks as long-term investments, even in a bear market. I don’t know what they will do in the coming weeks or months. In fact, if inflation remains higher than expected, interest rates rise beyond the confidence of investors or the United States. falls into a deep recession, it is quite possible that most or all of them will decline in the short term.
Although I have ensured some diversity, the list below is not a completely diverse portfolio. Instead, they are my highest conviction long-term stocks to invest in through 2023 and beyond. The best way to diversify your holdings in one step is to build the core of your portfolio around the Vanguard Total World Stock Index Fund ETF (VT0.11%).
Let’s now look at my list of the 10 best stocks to buy and hold for the long term (from smallest to largest market cap), followed by a summarized buying thesis for each.
Now that you’ve seen my 10 best stocks to buy, you might be wondering why I chose each company. Here’s a quick summary of why I’m such a fan of each of them as long-term investment stocks.
Best Stock For Short Term Investment
Pinterest (PINS -2.47%), $18 billion
Pinterest is an oasis of positivity in a social media landscape that is becoming increasingly depressing and divisive. This is partly due to ideas on Pinterest.
People go to Pinterest to focus on things, not other people. Whether it’s building a dream deck, baking a child’s birthday cake, or updating their wardrobe, Pinterest gives people visual inspiration for the things they want to do.
Recent results show that Pinterest’s growth has resumed, with the user base growing 8% year-over-year to 465 million in Q2 2023. There’s still plenty of potential for long-term user growth, and management recently said growth is returning. each time faster
The most interesting thing from the perspective of the long-term investor is that Pinterest has a great opportunity when it comes to monetizing its users. This is especially true internationally, where the largest number of Pinterest users are found but where the least monetization has occurred.
There is also a huge monetization opportunity as the company is moving away from its traditional advertising-focused model and trying to find ways to incorporate e-commerce into its platform. And the twist certainly makes sense.
Pinterest is a place where people go to find things they want to buy, and it has named e-commerce veteran Bill Ready as its CEO in 2022 to accelerate its turnaround. It may take some time for the company to realize its e-commerce potential, but it is making impressive progress and long-term investors could be handsomely rewarded.
MercadoLibre (MELI 1.06%), $67 billion
As one of my favorite long-term stock investments in the market, MercadoLibre is often referred to as the Amazon of Latin America, and rightfully so. The company operates an e-commerce marketplace with a major presence in some of the most populous countries in the region, including Brazil and Argentina.
However, there is much more to MercadoLibre. It operates a fast-growing payments platform called Mercado Pago, a logistics service known as Mercado Envios, a commercial lending platform, and more.
The market recorded $10.5 billion in merchandise volume in the second quarter of 2023, up 47% compared to the same quarter in 2022. Mercado Pago processes about $170 billion in annual volume, and about three-quarters of that comes from outside the company’s platform of e-commerce.
Both main parts of the business are growing rapidly. And don’t overlook Mercado Credito, the company’s young but fast-growing (and highly profitable) loan business. Mercado Credito has $3.3 billion in loans outstanding and has grown rapidly to date.
The best part is that all these businesses are relatively early stage. MercadoLibre’s trading volume is about 8% of Amazon’s, and its Mercado Pago payment volume is about 12% of the amount PayPal processes (PYPL 1.69%). So, there’s a lot of runway ahead.
MercadoLibre isn’t just the Amazon of Latin America: it’s Amazon, PayPal, Square, Shopify, and more, all in one. And it is in the very early stages of development. As the e-commerce and fintech landscape evolves in Latin America in the coming years, MercadoLibre could be a major long-term beneficiary.
Etsy (ETSY 1.44%), $8 billion
Before the COVID-19 pandemic, Etsy was growing well by connecting craft makers with customers looking for something a little more out of the ordinary than conventional e-commerce. E-commerce received a big boost during the pandemic. But Etsy has completely exploded, growing at more than twice the rate of overall e-commerce.
As the pandemic and the accompanying e-commerce boom have subsided, Etsy has also slowed. However, its growth across all product categories has been strong and remains impressive despite the difficult economic environment. In fact, in the second quarter of 2023, sales volume on Etsy’s marketplace was 175% higher than comparable pre-pandemic (2019) levels.
As you may have noticed throughout this list, powerful platforms capture my attention. Make no mistake: Etsy is one of them. Few e-commerce companies take on Amazon and survive. When Amazon launched its own handmade goods platform, Etsy not only survived, it won. But it may still be early for a great long-term growth story.
Due to the strength of its platform and brand, Etsy’s market opportunity is worth hundreds of billions – if not trillions – of dollars. Sales are expected to reach $13 billion on its platform by 2022, and it has only just begun to emerge. And with shares falling significantly in the recent decline in growth stocks, now could be a good time for patient, long-term investors to take a closer look.
Realty Income (O -0.72%), $38 billion
When it comes to value, growth, and income, it’s hard for long-term investors to find a more well-rounded stock than Realty Income.
If you’re not familiar with it, Realty Income is a real estate investment trust, or REIT, and invests primarily in stand-alone, single-tenant retail properties. Walgreens (WBA 1.04%), Dollar General (DG -0.26%) and FedEx (FDX 2.04%) are some examples of its main tenants.
Realty Income has approximately 13,100 properties in the U.S. and Europe, most of which are recession-resistant and less sensitive to e-commerce disruption than many other retail companies. Additionally, the company’s triple net lease structure helps create a stable and predictable revenue stream.
The proof is on the screen. Since listing on the New York Stock Exchange in 1994, Realty Income has produced an annual total return of 14.2%, outperforming the S&P 500. It has paid 639 consecutive monthly dividends and, as of September 2023, its yield is approximately 5.7%. The company has increased its payout for more than 100 consecutive quarters, and there’s no reason to think this pattern will end anytime soon.
Shopify (SHOP 0.94%), $75 billion
Shopify operates a platform designed to enable businesses of all sizes to sell their products online, with a special focus on empowering small businesses and growing with them by building long-term relationships.
Shopify offers a subscription plan starting at $39 per month for businesses and several adjacent services that help businesses operate smoothly, such as payment processing and logistics solutions.
Shopify’s “one-stop shop” approach to enabling e-commerce has made it a powerhouse. There are now more e-commerce sales through its ecosystem than any other company besides Amazon. However, Shopify is just getting started.
The platform has generated $6.3 billion in revenue over the last four quarters. However, this is only a fraction of its estimated $153 billion (and growing) market opportunity, as more retailers turn their attention to online sales.
Income
Revenue is the amount of money a company earns from regular operations before considering its gross income or costs.
E-commerce is still relatively early and accounts for just over 15% of retail sales in the United States. Shopify has the second part, giving it a powerful ecosystem with a network effect advantage over its competitors.
The share price is still well below recent market recession highs due to recession fears and signs of a slowdown in consumer spending, and Shopify looks like a great long-term opportunity.
PayPal (NYSE:PYPL), $68 billion
PayPal is a true ATM which has fallen almost 75% from its high.
The main reason is that investors became disappointed when PayPal’s growth slowed sharply in 2022 and management admitted that its previous user growth targets were unrealistic. Additionally, with recession fears, we could certainly see less consumer spending in the near term, which would mean less fee income for PayPal.
However, it is important for investors to realize that this is still a solid and very profitable business. The company has approximately 430 million active users between PayPal and Venmo and processes approximately $1.3 trillion in annual payment volume. The company expects free cash flow of about $5 billion by 2023 and is aggressively buying back its own shares.
It’s not hard to understand why PayPal management decides to use its capital this way. The stock is trading at its lowest price-to-sales ratio in history and at just 12 times forward earnings.
Intuitive Surgical (ISRG 1.75%), $105 billion
Surgeries performed with the help of robots outperform human hands. That general thesis hasn’t changed much since I first looked at Intuitive Surgical stock in 2005. Da Vinci Surgical Systems is the undisputed market leader, and the “razor and blade” model helps it generate recurring revenue streams as your system is used to perform procedures.
Intuitive Surgical dominates its sector with approximately 80% market share worldwide. And there is considerable scope for it to grow over time as the adoption of its surgical systems increases and the number of procedures supported increases. This is especially true in many international markets, where the implementation of robot-assisted surgery could be a long-term growth catalyst for this excellent business for decades to come.
Amazon (AMZN 1.67%), $1.42 trillion
Amazon doesn’t really need much of an elevator pitch for most people. The company has a dominant lead in the US e-commerce market and its Amazon Web Services cloud platform is also market leading, with a significant lead over the two other big players in the sector, Microsoft (MSFT 0, 17%) and Alphabet. (GOOGL 0.66%) (GOOG 0.7%).
However, there are more opportunities for growth than you might imagine. We are far from maximum adoption of e-commerce; This still represents a little more than 15% of all US retail sales. The cloud industry is relatively young and is expected to nearly quadruple in size to reach a $2.3 trillion market by 2032. Amazon also has great potential in healthcare, grocery stores, neighborhood markets and other sectors.
Berkshire Hathaway (BRK.A 0.39%)(BRK.B 0.43%), $815 billion
Although the majority of this list is made up of growth stocks, or at least stocks that have some interesting growth drivers, this is a relatively boring value selection of the group (but in the best possible way).
Berkshire Hathaway owns a collection of approximately 60 subsidiaries, including well-known brands such as GEICO, Duracell, and Dairy Queen. Berkshire also has a common stock portfolio of about $355 billion, including large stakes in Apple (AAPL -0.74%), Bank of America (BAC -0.14%), Chevron (CVX -1.46%), American Express (AXP -0.1%) and Coca-Cola. Includes scale stake. Kola (KO -1.04%), as well as positions in dozens of other companies.
Most of the largest positions were picked up by famed investor Warren Buffett, who still manages the majority of Berkshire’s investments. In fact, if Berkshire were a mutual fund, it would be the largest actively managed mutual fund in the world.
Buffett bears will say he’s lost his fastball, but Berkshire has been outperforming the market in most years despite its sheer size. And while Berkshire certainly won’t deliver the 3,787,464% return (not a typo) that it has delivered since Buffett took over by the end of 2022, there’s no reason to believe it won’t continue to outperform the S&P 500. Near future.
Buffett won’t be in charge forever. But Berkshire is his legacy, and he has been protecting it for years to ensure it remains in good shape long after he is no longer at the helm. Showing his confidence, he and his business partner Charlie Munger have been regularly buying back shares. This is a good sign for patient, long-term investors like us.
Walt Disney (DIS -0.29%), $150 billion
The Mouse House is like all-season tires on the wallet. The pandemic hurt its theme park and movie businesses, but it helped the Disney+ streaming service, which has become a powerhouse years earlier than Disney expected.
In fact, less than four years after launch, Disney+ now has approximately 146 million subscribers, compared to the company’s initial five-year target of between 60 and 90 million. Disney is definitely still trying to figure out the best ways to make Disney+ a profitable business, but it’s clearly making progress in the right direction. The market is tolerating the price increase with little impact on customer base.
Demand for Disney theme parks, movies and cruise lines remains very strong in 2023 despite inflationary pressures and recession fears. In fact, revenue at Disney parks is much higher than pre-pandemic times due to initiatives that have driven more spending per guest. Additionally, the company recently announced that it will invest $60 billion over the next 10 years in its theme parks and cruise lines to ensure that they remain filled for the foreseeable future.
Disney has also focused on the profitability of Disney+ and its other streaming platforms, Hulu and ESPN+, which could be a powerful combination of profitable revenue streams in any weather conditions. Simply put, Disney could be the ultimate combination of a personalized experiential game and a technology-focused development business.
Its incredible set of intellectual property (Marvel Cinematic Universe/Star Wars/ESPN/Pixar/Disney) and ATM theme park business give it a margin of safety that makes it perhaps the safest stock on this list. And as new areas of its business develop, it still has the potential for tremendous profit growth.
