When Berkshire Hathaway (BRK.A -0.76%) (BRK.B -0.69%) owns a stock, it's often worth at least considering for your portfolio. That's because under the direction of chairman and CEO Warren Buffett, Berkshire has become the largest investment holdings company on the planet. Its investment portfolio is currently worth approximately $381 billion.

With a 4.8 million-share stake valued at $534 million, Floor & Decor (FND 2.66%) is among the smaller positions in Berkshire Hathaway's portfolio. However, that small position doesn't take away from the fact that the stock could be a great fit within the portfolio of a growth investor. Here are three reasons why.

1. A business with a winning blueprint

If it weren't for Berkshire Hathaway's stake in Floor & Decor, the company probably wouldn't garner much attention at all from investors. After all, its $12 billion market capitalization pales in comparison to the much higher market values of broader home improvement retailers Home Depot and Lowe's.

But Floor & Decor enjoys unique competitive advantages within the hard-surface flooring retail industry that its giant competitors could only dream of having. Home Depot and Lowe's each offer two or three aisles at most for hard-surface flooring products.

If customers go to these stores first and can't find what they're looking for, they'll almost certainly visit Floor & Decor. This is because the company dedicates all its average store space of nearly 80,000 square feet to hard-surface flooring products. That explains how Floor & Decor can stock over 4,000 vinyl, natural stone, laminate, tile, and wood flooring products at its stores.

And the company's vastly superior product selection compared to that of bigger home improvement retailers isn't the only thing to like about it: Unlike Home Depot and Lowe's, Floor & Decor cuts the middlemen like wholesalers out of the product sourcing process. This approach helps the company achieve cost savings on its merchandise, which are then passed onto consumers.

These two characteristics are why a $10,000 investment made in the stock five years ago would be valued at over $22,000 today. Put into perspective, that's better than the $17,500 that the same investment in the S&P 500 index would now be worth.

2. The growth runway remains intact

The market-beating returns that attracted Berkshire Hathaway to Floor & Decor look poised to continue. The company had just 199 warehouse stores/design studios as of March 31, but Floor & Decor has a long-term objective of 500 store locations.

Such significant expansion in the company's store count explains why analysts believe its non-GAAP (adjusted) diluted earnings per share (EPS) will grow by 13.6% annually for the next five years. Stacked up against the home improvement retail industry average annual earnings growth forecast of 3.5%, this is an exceptionally strong growth profile.

3. Floor & Decor is a no-brainer buy

With the market recognizing the potential of Floor & Decor, shares of the stock rallied 49% so far in 2023. This pushed the retailer's forward price-to-earnings (P/E) ratio up to 34, which is well above the home improvement retail industry average forward P/E ratio of 19.3. But if there is any business that deserves a sizable valuation premium, Floor & Decor is top of mind. This makes the stock an intriguing pick for growth investors at the current $112 share price.