2022 was not a great year for my stock portfolio. Overall, the value of my investment accounts declined by about 22% last year.
However, I’m not discouraged. Quite the opposite. For one thing, I’m a long-term investor. Most of my stocks are held in retirement accounts, and I just turned 40 years old last year. So, I have at least 20 years to ride out the ups and downs of the stock market before I’ll need to cash out of anything. Plus, there are some excellent bargains in the stock market for patient long-term investors. And I’ve been taking advantage. Here are four stocks I’ve already bought for my portfolio so far this year.
Redfin (RDFN) is the most beaten-down stock on this list and is also the most speculative stock I’ve bought recently. Even after a recent rebound, Redfin is still well over 90% below its highs. Not only did the real estate market nearly grind to a halt in the latter half of 2022, but the business was losing money hand over fist, mostly because of its RedfinNow iBuying division.
We’re starting to see signs that things are improving. Redfin took steps to stop the bleeding, shutting down RedfinNow and cutting expenses throughout the business. And recent data indicates the real estate market could be turning a corner. CEO Glenn Kelman recently said that January’s real estate rebound is better than anyone expected, and if this continues, Redfin could end up being a steal at this level.
MercadoLibre (MELI) has a leading e-commerce platform in Brazil, Argentina, and several other Latin American countries, and also has a massive payments platform, logistics network, and an up-and-coming lending operation. It also has started incorporating advertising into its business, and while it’s still in the early stages, it could grow into a massive revenue stream over time. Despite the short-term headwinds, MercadoLibre’s growth has been impressive and the company has lots of potential over the long run.
MercadoLibre’s competitive landscape has also started to shift in the company’s favor. One of its top rivals in Brazil, Americanas S.A., recently revealed a $4 billion accounting scandal, and Southeast Asia-based Sea Limited (SE) decided to exit Argentina and reduce its presence in Chile, Columbia, and Mexico. With e-commerce, mobile payment, and consumer lending adoption still relatively early in Latin America, MercadoLibre could have tons of room to grow from here.
3. Howard Hughes
Howard Hughes Corporation (HHC) is a land developer. The general idea is that Howard Hughes will acquire a massive plot of land, and spend decades developing it into a small city by selling land to builders and developing commercial properties for its own portfolio. If you’ve ever been to The Woodlands near Houston or Summerlin in the Las Vegas area, those are examples of Howard Hughes’ master-planned communities. In fact, the company’s name comes from the iconic businessman, who founded the Summerlin community.
Howard Hughes is a long-term value creator that is currently at a depressed valuation because of the uncertain real estate market. But I added to my position recently, and Howard Hughes is one of the largest investments in my portfolio.
4. Walt Disney
Walt Disney (DIS) doesn’t need much of an introduction, but the massive entertainment conglomerate is trading for nearly 50% below its peak. There are fears about what a slowing economy could mean for its theme parks and film franchises, and about the ability to turn Disney’s streaming division into a profitable business.
I’ve been a Disney shareholder for a long time, and recently added when Bob Iger agreed to come back as CEO. After all, Disney handily beat the S&P 500 during Iger’s first tenure and I’m excited to see what he can do now that the streaming business has hundreds of millions of loyal, paying subscribers.
I bought these for the long term
To be perfectly clear, I think all four of these could have an excellent 2023 if the U.S. economy avoids a recession, the real estate market recovers, and inflation is brought under control. But I also recognize those are all big ifs. So, to be clear, I bought all four because I think I’ll be glad I did in 10-20 years. But I’m prepared for a bit of turbulence in the meantime.
— Matthew Frankel
Motley Fool Stock Advisor's average stock pick is up over 350%*, beating the market by an incredible 4-1 margin. Here’s what you get if you join up with us today: Two new stock recommendations each month. A short list of Best Buys Now. Stocks we feel present the most timely buying opportunity, so you know what to focus on today. There's so much more, including a membership-fee-back guarantee. New members can join today for only $99/year.
Source: The Motley Fool