Just Released: The 5 Best Stocks to Buy in January 2023 [PREMIUM PICKS]

Let’s cut to the chase: It’s absolutely true that shares of Redfin, an online real estate platform, have fallen 93% over the past 20 months.

| More on:
two people use AI to examine a house

Source: Getty Images

Premium content from Motley Fool Stock Advisor Canada

“Best Buys Now” Pick #1:

Redfin (NASDAQ:RDFN)

Let’s cut to the chase: It’s absolutely true that shares of Redfin (NASDAQ:RDFN), an online real estate platform, have fallen 93% over the past 20 months.

But the thing is, what’s done is done. What matters is where the stock goes from here. And from where we sit, when we consider that in three to five years, there are going to be perhaps hundreds of companies that we’re going to be shaking our heads at, saying, “XYZ traded at what price in early 2023?!” … my bet is that Redfin is going to be one of those companies.

About Redfin

Last updated Feb 03, 2023, 04:00:00pm EST
Current Price $9.45
Change $-0.33 (-3.4%)
Close Price $9.45
Open Price $9.00
Bid $9.40
Ask $9.49
Day Range $8.75 – $10.59
Year Range $3.08 – $32.30
Volume 7,992,510
Average Volume 3,986,204
Market Cap $1,027,675,385.00
Earnings Per Share $-2.70

A primary reason is that the company is ending its RedfinNow business, which had been buying homes outright with its balance sheet in the hopes of quickly selling them for more. This was a huge drain on the company’s liquidity, and the fact that it’s ended significantly decreases the risk associated with investing in Redfin.

Yet Redfin’s stock remains priced as though the company is going to die. We don’t think it’s going to die — especially with RedfinNow off the table. If you take appropriately sized positions in these “priced-to-die-but-don’t-die” scenarios, your brokerage account balance can soar. Even when some of these investments inevitably go wrong, the ones you get right will more than make it up for you.

So what’s “appropriately sized?” When thinking in the context of an entire portfolio, we’re of the opinion that Redfin could be a 1-2% position. Maybe don’t buy the entire position all at once. That way, if it works, you’re going to be very happy. And if it doesn’t, it doesn’t hurt that badly.

There could be another 90% decline for Redfin’s stock price in its near future. But we’re long-term investors, and we think the upside potential here warrants this risk.

“Best Buys Now” Pick #2

Redacted

Want All 5 Best Buy Now Stocks? Enter your email address!

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium service or advisor. We’re Motley! Questioning an investing thesis — even one of our own — helps us all think critically about investing and make decisions that help us become smarter, happier, and richer, so we sometimes publish articles that may not be in line with recommendations, rankings or other content.

The Motley Fool recommends Redfin. The Motley Fool has a disclosure policy.

More on Stocks for Beginners

A worker uses a laptop inside a restaurant.
Stocks for Beginners

Stubborn Interest Rates: 2 TSX Stocks That Can Play Along (and Even Win)

Higher interest rates are actually good for these stocks. They trade at good valuations and provide nice dividends.

Read more »

Tired or stressed businessman sitting on the walkway in panic digital stock market financial background
Stocks for Beginners

Buying These 2 Stocks Is a Good Way to Hedge Against a Falling Market

Investors looking to hedge against a stock downturn should consider these two stocks as viable long-term picks.

Read more »

Dollar symbol and Canadian flag on keyboard
Stocks for Beginners

2 Canadian Stocks I’ll Be Buying Hand Over Fist in 2023

There are some great Canadian stocks on sale right now. Here's a duo of companies I'm buying that you may…

Read more »

Women's fashion boutique Aritzia is a top stock to buy in September 2022.
Stocks for Beginners

Has ATZ Stock Bottomed Out?

Has ATZ stock finally bottomed out after losing nearly 10% of its value in 2022? Let’s find out.

Read more »

Stocks for Beginners

4 Top Value Stocks to Buy in February 2023

Not only are all these value stocks worth considering, each is growing significantly on the TSX today!

Read more »

Couple relaxing on a beach in front of a sunset
Stocks for Beginners

3 Stocks That Could Help You Retire a Millionaire

Looking for some stocks that can help you retire rich? Here are three buy-and-forget options that will do the trick.

Read more »

Target. Stand out from the crowd
Stocks for Beginners

3 Must-Buy TSX Stocks for Anyone New to Investing

Are you new to investing? These three TSX stocks for income, value, and growth are must-buys for any Canadian investor…

Read more »

grow dividends
Stocks for Beginners

After the Spinoff, Brookfield Stock Rose 16% in January

Brookfield stock is a wonderful business with a track record of delivering annualized returns of over 16%. And it's cheap…

Read more »