I'm always adding money to my investment accounts from dividend income and regular contributions. Because of that, I'm routinely buying stocks. However, as a Fool.com contributor, I can't always buy the ones I want when I want due to trading restrictions.
Right now, I'm unable to buy some of my highest-conviction ideas, including Blackstone (BX -0.43%), CrowdStrike (CRWD -0.68%), and Prologis (PLD -1.57%). I can't wait to add to my positions in each one as soon as I can make those purchases. All three have seemingly unstoppable growth prospects, which is why I'm so optimistic about their future.
Capitalizing on a multitrillion-dollar opportunity
I've refined my investment approach over the years. I've started to concentrate my portfolio on my highest-conviction investing themes. It's something I've learned from Blackstone's thematic investment approach within the private equity, credit, and real estate funds it manages.
One of my highest-conviction investment ideas these days is the growth in alternative investing. Investors are increasingly allocating more of their portfolios to alternatives to the public stock and bond markets. That's because alternatives can increase their income and lower their volatility while improving their returns.
Blackstone is the leader of this segment, with over $950 billion of assets under management (AUM). The company has been growing its AUM and the associated fee-related income at a rapid rate (AUM was up 30% in the third quarter, while fee-related earnings soared 51%). That upward trend should continue as more investors (especially in the virtually untapped retail side) increase their allocation to alternatives in the future. While the company faced some headwinds in 2022, which put pressure on its stock price, I expect it to continue growing at a brisk pace for years to come.
Cashing in on cybersecurity
Another of my highest-conviction ideas is cybersecurity. Cyberthreats are growing more complex and costly, which is leading more companies to bolster their network security. They're looking to consolidate vendors into a simplified and integrated solution that can protect their data from threats.
CrowdStrike is one of the leaders in cloud security. The company's leading-edge Falcon platform leverages the power of artificial intelligence to stop breaches.
It's growing briskly as more companies join the platform and subscribe to its growing number of modules. CrowdStrike's annual recurring revenue (ARR) grew 54% in its fiscal third quarter to $2.34 billion, while it produced a record free cash flow of $174 million.
CrowdStrike sees an enormous growth opportunity ahead. It expects its total addressable market opportunity to expand from $76 billion this year to $158 billion by 2026, driven by organic market growth and its investments in product innovation. That massive and growing market opportunity leads the company to believe it can more than double its ARR to $5 billion over the next few years.
Capitalizing on the rise of e-commerce
One of Blackstone's strongest investing themes is logistics real estate. The sector is benefiting from the growth of e-commerce and shifting supply chain management practices.
Blackstone's confidence in the sector has bolstered my conviction in its future. My favorite way to invest in this theme is through leading industrial REIT Prologis. It has a global portfolio of high-quality logistics properties.
The company has tremendous embedded growth. Prologis has yet to capture the epic surge in warehouse rental rates over the past few years due to the long-term nature of its leases. Because of that, the company expects its same-store net operating income will grow at an 8% to 10% annual rate for the next several years as existing leases expire and reprice to the much higher market rate rents. That growth rate assumes no further market rent increases, which seems unlikely given the persistently tight supplies.
In addition, Prologis recently acquired its largest rival, Duke Realty, in a $26 billion deal. The transaction will be accretive to its earnings and drive incremental earnings growth as the company captures merger synergies. Finally, Prologis has a large development pipeline and vast land base, supporting additional growth. These growth catalysts should enable the company to continue delivering sector-leading earnings and dividend growth.
Aligning my portfolio with my convictions
Blackstone, CrowdStrike, and Prologis are some of my highest-conviction stocks because they're leaders across my top investment themes. Because of that, I can't wait to add to my position in each as soon as I'm allowed this year. I firmly believe they'll produce market-shattering total returns in the coming years as they capitalize on their seemingly unstoppable growth prospects.
