My 5 Largest Stock Positions Heading Into 2023 – The Motley Fool

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I own about 40 different stocks in my personal portfolio, but the position sizes vary dramatically. I have a few extremely small positions in speculative growth stocks, some mid-sized positions in promising and established businesses I love, and some rather large positions in the stocks for which I have the highest conviction level.
As we head into 2023, here’s where the larger end of my portfolio stands and a short description of why I’m so confident in each business.
Boston Omaha (BOC -2.27%) is an emerging conglomerate that operates subsidiary businesses, owns minority stakes in both public and private companies, and operates an asset management business. Its three subsidiaries are in billboard advertising, insurance, and broadband internet. Minority investments include homebuilder Dream Finders Homes (DFH) and aviation infrastructure company Sky Harbour (SKYH -4.12%).
Boston Omaha is often compared to an early-stage Berkshire Hathaway (BRK.A -2.16%) (BRK.B -1.93%), and it’s easy to see why — its co-CEOs are following Warren Buffett’s playbook for conglomerate-building pretty closely. I don’t necessarily believe Boston Omaha will grow into a $600 billion behemoth like Berkshire, but this is a well-run company whose addressable market opportunity is virtually unlimited.
Think of Howard Hughes Corporation (HHC -1.27%) as a real-life version of the video game Sim City. The company is a developer of master-planned communities that are so large they are more like small cities. If you’ve ever been to the Woodlands in the Houston area or Summerlin in Las Vegas, those are examples of Howard Hughes’ communities.
Here’s the general idea: Howard Hughes acquires a massive plot of land — like the 37,000 acres it recently bought near Phoenix. It sells a small amount of it to homebuilders who develop residential neighborhoods. The presence of homes creates demand for commercial assets, which Howard Hughes builds and monetizes. Then, the company sells more land to builders and creates more commercial properties. This cycle can repeat for several decades, creating tremendous value in the process.
Realty Income (O -1.18%) is a real estate investment trust, or REIT, that focuses on single-tenant commercial properties, especially those occupied by recession-resistant retail businesses like drug stores, convenience stores, and dollar stores, just to name a few examples.
The business is designed for steady growth and income. Tenants sign long-term leases that require them to pay for the variable costs of insurance, taxes, and building maintenance, with gradual rent increases built right in. The proof is in the numbers — Realty Income has handily beaten the S&P 500 since its 1994 NYSE debut.
Probably the most speculative of my five top holdings, Pinterest (PINS -3.18%) is my favorite social media play by a wide margin. The platform has done a great job of building its user base over the years but has tons of room to grow its monetization, especially among the majority of its users who are international. The company is also a natural fit for e-commerce integration and is just starting to figure out where it could fit in the e-commerce landscape. In a nutshell, Pinterest is a cash-flow-generating business with massive upside potential.
General Motors (GM -5.56%) is perhaps the most overlooked way to invest in the electric and autonomous vehicle revolution. The company has the differentiator of developing its own battery architecture (Ultium), the early results from its newer EV sales, such as the Hummer EV, have been extremely promising, and the company has unmatched brand loyalty that should carry over as it electrifies more of its popular models.
The company is also the majority owner of Cruise, which is arguably the most promising autonomous vehicle start-up, with paid robotaxi rides currently underway in the San Francisco area. Plus, GM is a highly profitable business, so it can afford to invest in its EV development as needed.
No two investors are perfectly alike, and I’m completely aware that some of the stocks I put my own money into aren’t going to get everyone excited. However, there are some common themes among these and other large positions that are worth noting.
For one thing, while several industries are represented here, these are generally profitable businesses that have competitive advantages, margins of safety, and lots of room to grow. For example, Realty Income is the largest REIT specializing in single-tenant retail, but there are literally trillions of dollars’ worth of these properties it could potentially acquire in the coming decades. The company is not only consistently profitable but has grown its profits like clockwork, and as it grows, the efficiency of the business should get even stronger.
The bottom line is that I put so much of my own money into these stocks because I see them as excellent combinations of growth potential and safety, and that’s a winning combination for long-term investors.
Matthew Frankel, CFP® has positions in Berkshire Hathaway, Boston Omaha, Dream Finders Homes, General Motors, Howard Hughes, Pinterest, Realty Income, and Sky Harbour Group. The Motley Fool has positions in and recommends Berkshire Hathaway, Boston Omaha, Dream Finders Homes, Howard Hughes, and Pinterest. The Motley Fool recommends the following options: long January 2023 $200 calls on Berkshire Hathaway, short January 2023 $200 puts on Berkshire Hathaway, and short January 2023 $265 calls on Berkshire Hathaway. The Motley Fool has a disclosure policy.
*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.
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