Presented below are ten stocks that may be valuable additions to your investment portfolio not only for the remainder of 2023 but also for future years.
With literally thousands of publicly traded companies available for investment, in addition to numerous exchange-traded funds (ETFs) and mutual funds that you can purchase, it’s no wonder that many investors struggle to determine where to start. Furthermore, given the recent market decline, particularly regarding growth stocks, there are numerous stocks trading at significantly lower prices than they were just six months or a year ago.
Which stocks are worth investing in for 2023? While I cannot predict with certainty which stocks will yield the highest returns, I have attempted the next best approach. In this piece, I will examine ten stocks that I believe may be excellent choices for long-term investors seeking to invest their funds.
Prior to delving into the stocks, we must recognize three important considerations:
- Selecting the most appropriate stocks to purchase is heavily influenced by your individual financial circumstances. To evaluate your position, please refer to our manual on investing in stocks. This resource covers subjects like creating an emergency fund, asset allocation, and determining when it is advisable to invest in stocks.
- I view these stocks as excellent long-term investment opportunities. However, I cannot predict their performance over the next few weeks or months. In fact, it is entirely possible that a prolonged period of high inflation or a recession in the United States may cause most, if not all, of these stocks to decrease in value in the short term.
- Despite my efforts to include some diversity, the list provided below does not constitute a fully diversified portfolio. Rather, these are the stocks that I have the utmost confidence in for long-term investment in 2023 and beyond. To diversify your holdings in a single step, it is recommended to construct the foundation of your portfolio around a fund such as the Vanguard Total World Stock Index Fund ETF (VT).
Now, let’s proceed to my list of the top 10 stocks to purchase and hold for the long term, in ascending order of market capitalization. Following this list, I will provide a brief overview of the purchase rationale for each stock.
Top 10 Stocks to Purchase in February 2023
- Etsy (ETSY), $17 billion
- Pinterest (PINS), $17 billion
- Block (SQ), $47 billion
- Shopify (SHOP), $54 billion
- Realty Income (O), $41 billion
- MercadoLibre (MELI), $57 billion
- Intuitive Surgical (ISRG), $85 billion
- Walt Disney (DIS), $197 billion
- Berkshire Hathaway (BRK.A & BRK.B), $692 billion
- Amazon (AMZN), $1 trillion
(Market capitalizations rounded to the nearest billion, as of February 15, 2023.)
Brief summaries of each stock
After reviewing my top 10 stock picks for the present, you may be curious about the reasons for my selection of each company. Below is a brief overview of why I consider each of these stocks a favorable long-term investment opportunity.
1. Etsy
Prior to the COVID-19 pandemic, Etsy was exhibiting favorable growth by facilitating the connection of skilled artisans with customers seeking unique products beyond those available on conventional e-commerce platforms. Subsequently, the e-commerce sector witnessed a considerable surge during the pandemic. However, Etsy experienced an explosive increase, growing at a rate more than twice that of the overall e-commerce industry.
Although the surge in demand for unique face masks during the pandemic was advantageous for Etsy, the company’s growth has been remarkable across all product categories. In Q2 2022, Etsy’s marketplace sales volume surged by 141% over the corresponding pre-pandemic levels, indicating a noteworthy expansion.
As you might observe from my top 10 stock picks, I am drawn to robust platforms. Undoubtedly, Etsy is among them. Only a few e-commerce firms can compete with Amazon and prevail. However, Etsy not only endured when Amazon introduced its handmade goods platform, but it also emerged victorious. Nonetheless, we might still be in the early stages of a remarkable long-term growth narrative for Etsy.
Due to its powerful platform and robust brand, Etsy has a market potential of hundreds of billions of dollars, and it has only begun to explore this potential. Furthermore, with the recent decline in the growth stock market, the stock has experienced a significant drop, making it an ideal opportunity for patient long-term investors to take a closer look.
2. Pinterest
Pinterest stands out as a beacon of positivity in the current social media landscape that has become more and more gloomy and divisive. This is, in part, due to the platform’s focus on ideas.
Pinterest stands out as a unique social media platform as it revolves around ideas rather than individuals. Users flock to Pinterest to discover inspiration for various activities like designing their dream deck, baking a cake for their child’s birthday or revamping their wardrobe. The platform provides a visually immersive experience that helps users find the motivation they need to bring their ideas to life.
The recent market decline in 2022 caused Pinterest’s stock to drop, primarily due to a contraction in its user base as pandemic restrictions eased worldwide. However, the company’s latest results suggest that the user base has stabilized for now. Moreover, considering that Pinterest has only a fraction of Facebook’s user base, there is still a significant potential for long-term user growth.
From a long-term investor’s perspective, the most thrilling aspect is Pinterest’s enormous potential for monetizing its user base. As the company moves away from its traditional ad-focused model and seeks to integrate e-commerce into its platform, there are abundant opportunities for growth.
The shift towards e-commerce is a logical move for Pinterest, given that its users often look for items to purchase on the platform. By appointing e-commerce expert Bill Ready as its new CEO, Pinterest is making strides towards this transition. While the full potential of this pivot may take some time to realize, patient long-term investors could see significant returns.
The advertising, lead generation, and product placement potential on Pinterest is immense as people are already there seeking ideas and inspiration. This is particularly true for international markets, which make up 80% of its user base but only a small portion of its revenue.
3. Block
Block, previously known as Square, has transformed from a specialized hardware payment processing company to a comprehensive financial ecosystem for individuals and merchants. For businesses, Block has processed approximately $188 billion in payment volume during the last four quarters, and in addition, it provides various related services.
Block has also expanded its offerings to the individual consumer market with the popular Cash App, which has accumulated 47 million users. The Cash App allows for person-to-person money transfers, direct deposits, debit cards, and the ability to trade stocks and cryptocurrencies like Bitcoin.
Block’s recent acquisitions of the music app Tidal and the Afterpay buy-now, pay-later platform, along with the long-term trend towards cashless payment adoption, make it a strong contender for my top 10 best stocks to buy now. As its ecosystem continues to evolve, Block’s potential for growth in many other verticals only adds to its attractiveness as a long-term investment.
4. Shopify
Shopify’s platform is built to enable businesses of all sizes to sell their products online. The company places a particular emphasis on empowering smaller businesses and cultivating long-term relationships with them. Shopify’s subscription plan begins at $29 per month, and it also provides various complementary services that aid businesses in running their operations smoothly, including payment processing solutions and logistics.
Shopify’s comprehensive approach to e-commerce has made it a dominant player. Its ecosystem processes more e-commerce sales than any company other than Amazon. Despite this, Shopify may only be in the beginning stages of its growth. In the past four quarters, the platform generated just over $5 billion in revenue, which is a small fraction of its estimated $153 billion (and expanding) market potential as more retailers move their attention to online sales.
Despite e-commerce being in the early stages, with it accounting for less than 15% of retail sales in the U.S., Shopify already holds the number two share, giving it an advantage over many of the world’s biggest retailers. Although shares declined significantly in the recent market downturn due to concerns of a recession and signs of consumer spending slowing down, Shopify appears to be a clear candidate for one of the best stocks to buy in 2023.
5. Realty Income
It’s difficult to find a more well-rounded stock for long-term investors than Realty Income, given its strong value, growth, and income potential.
Realty Income is a REIT that focuses on investing in single-tenant retail properties. Some of its top tenants include Walgreens (WBA), Dollar General (DG), and FedEx (FDX). The company owns over 11,000 properties across the U.S. and Europe, with properties that are relatively resilient to economic downturns and e-commerce disruption. The company’s triple-net lease structure helps to generate a stable and predictable income stream, making it an attractive choice for long-term investors looking for a well-rounded stock with a good balance of value, growth, and income potential.
Since it listed on the NYSE in 1994, Realty Income has delivered annualized total returns of 15.1%, which significantly outperforms the S&P 500. The company has paid more than 600 consecutive monthly dividends, with a current annual yield of around 5%, and has raised its dividend an impressive 116 times, without any cuts.
6. MercadoLibre
MercadoLibre, which is often called the Amazon of Latin America, is one of my preferred long-term stock investments in the market. It operates an e-commerce marketplace that has a powerful presence in some of the most densely populated nations in the region, including Brazil and Argentina.
MercadoLibre offers more than just an e-commerce marketplace. In addition to dominating the Latin American region with its e-commerce platform, the company has expanded its business to include a growing payments platform, Mercado Pago, a logistics service, Mercado Envios, and a business lending platform, Mercado Credito. The company saw $8.6 billion in merchandise volume in Q2 2022, and Mercado Pago processed over $120 billion in annualized volume, with the majority coming from outside the e-commerce platform. Mercado Credito has also experienced rapid growth, more than tripling in size over the past year with $2.7 billion in outstanding loan balances.
A major advantage is that these ventures are still in their nascent stages. MercadoLibre’s merchandise volume is only around 6% of Amazon’s, while its Mercado Pago payment volume is below 10% of what PayPal (PYPL) handles. This implies that there is substantial potential for growth.
MercadoLibre is not merely the Amazon of Latin America. It combines the capabilities of Amazon, PayPal, Square, Shopify, and many others into a single platform. What’s more, it is still in its early stages of expansion. As the e-commerce and fintech sectors continue to develop in Latin America, MercadoLibre could enjoy substantial long-term gains.
7. Intuitive Surgical
The idea that robot-assisted surgery outperforms human hands hasn’t changed much since I first discovered Intuitive Surgical stock in 2005. The da Vinci surgical system dominates the market, and its “razors and blades” business model generates recurring revenue as its systems are utilized for surgeries.
Intuitive Surgical is a major player in its industry, with significant potential for expansion as its surgical systems gain wider adoption and support more procedures over time. This is especially true in numerous global markets, where the integration of robot-assisted surgery could be a growth driver for this outstanding business over the next several decades.
8. Disney
Disney and its unique business that can’t be replicated is a reliable addition to any portfolio, serving as an all-weather position. While the pandemic impacted its theme park and movie businesses, it boosted the Disney+ streaming service, which has grown into a powerhouse much faster than the company anticipated. Disney+ has now surpassed 150 million subscribers, achieving its initial five-year goal in just three years.
In 2022, Disney is experiencing a resurgence in demand for its theme parks and movies, surpassing even pre-pandemic levels. This is partly due to initiatives that have increased per-guest spending. Meanwhile, Disney+ has been a massive success, and the company is now concentrating on expanding this and its other streaming platforms, Hulu and ESPN+.
Disney represents a unique combination of a reopening play and a pandemic-fueled growth business. Its impressive portfolio of intellectual property (including Marvel Cinematic Universe, Star Wars, ESPN, Pixar, and Disney) and cash-generating theme parks provide a level of security that sets it apart as one of the safest stocks in the list. Moreover, it still has vast untapped growth potential as its newer business segments continue to develop.
9. Berkshire Hathaway
Berkshire Hathaway is the value play on this list, in contrast to the mostly growth-oriented stocks. The company is a conglomerate that owns about 60 subsidiaries, including well-known names like GEICO, Duracell, and Dairy Queen. Additionally, Berkshire has a massive portfolio of common stocks worth over $340 billion, with significant holdings in companies like Apple (AAPL), Bank of America (BAC), Chevron (CVX), American Express (AXP), and Coca-Cola (KO). Many of these investments were personally chosen by the company’s legendary founder and investor, Warren Buffett, who, at age 92, still oversees most of Berkshire’s investment decisions.
The skeptics of Buffett’s investment approach may argue that he has lost his touch, but despite its enormous size, Berkshire Hathaway continues to generate returns that surpass the market in most years. Although it is unlikely that Berkshire will replicate the astounding 3,600,000% return (which is not a typo) that it has achieved under Buffett’s leadership, there is no reason to doubt that it will continue to exceed the S&P 500 in the coming years. If we consider Berkshire Hathaway as a mutual fund, it would be the biggest actively managed mutual fund globally.
While Warren Buffett won’t be leading Berkshire Hathaway forever, he has been making efforts to ensure its strength and stability for the long term. He has been buying back shares regularly alongside his partner Charlie Munger, showing confidence in the company’s future. As patient long-term investors, this is a positive signal for us, especially considering the company’s status as Buffett’s legacy.
10. Amazon
It’s not hard to convince most people to invest in Amazon since the company’s dominance in the US e-commerce market speaks for itself with over $600 billion in gross merchandise sales in the last year. Moreover, its cloud platform, Amazon Web Services, is also a leader in the market.
There’s even more room for growth than you might expect for Amazon. E-commerce still has a long way to go before reaching its full potential, with less than 15% of U.S. retail sales coming from online sales. The cloud industry is also in its early stages, providing plenty of growth opportunities for Amazon’s Amazon Web Services platform. Additionally, Amazon has significant potential in other areas such as healthcare, grocery stores, neighborhood markets, and beyond.
Final conclusions to consider when using this list of stocks.
If you’re new to investing (or seeking guidance), we recommend reading our guide on how to invest in stocks. It covers everything from getting started to developing a personal investing strategy and determining the appropriate allocation of your funds into stocks.
While I’m optimistic about the prospects of all these stocks and believe they are solid purchases at this time, they may not be ideal for investors who are just starting out and don’t yet have well-established and diversified portfolios. For those who are new to investing, it’s recommended to take a look at the 15 top stocks for beginners. While I am confident that the 10 stocks discussed here represent some of the best long-term investments you can make today, it’s important to begin with the stocks that resonate with you, and feel free to disregard the ones that do not.
Happy investing!
Doug Taylor is a seasoned journalist with nearly 10 years experience. While studying journalism at the University of California, Doug found a passion for finding engaging stories. As a contributor to Oracle Savvy, Doug mostly covers state and national developments.
