U-Haul (UHAL): storage value the market misses
U-Haul (UHAL) is known for its truck and trailer rental business, used when people move between apartments or handle a family change. It also runs a self-storage business, often placed at the same sites as its truck facilities. The problem: the company's financials do not break out this segment clearly, so the two businesses get lumped together.
My view is that the self-storage business alone is worth the entire market cap of the company. That estimate comes from comparing it to a recent buyout of the number five player in the self-storage space. On that math, buyers of the stock get the trucking business for free. UHAL sits in the top five of the self-storage REIT market, yet it is not classified as a self-storage REIT, and it is not a pure trucking company either. That mixed identity is part of why Wall Street misprices it - analysts are split by sector, and neither storage nor trucking analysts cover the whole thing.
The business is family controlled and owned. Owners like these make long-term capital investments, which leads to capital allocation decisions that are good for the business over time. This is less exciting than AI names or high-beta infrastructure plays, but it has stood the test of time and performs in a steady way.
Is it cyclical or tied to the economy? Not really. People often assume moving activity tracks housing starts. In fact most do-it-yourself movers are going apartment to apartment, heading to college, or handling a life change. The pattern is close to non-cyclical. During COVID the only issue was load balancing: since U-Haul (UHAL) is Texas based, many trucks ended up leaving California and had to be repositioned. The truck rental and storage business is also defensive against AI risk - AI has little effect on it.
Which segment creates the most value over the next few years? Building a self-storage facility needs a large amount of capital in the ground before it collects a single rental payment. U-Haul (UHAL) has now built many of those properties, so the storage business is on the upswing with a lot of upside from here that the current financials do not show. I am pushing the company to release financials that break out each line of business, which would let investors see this value clearly and would be a big step forward.
Alphabet (GOOGL): full-stack position and the AI debate
I first invested in Alphabet (GOOGL) in 2019, buying an asset-light business with a dominant share in paid search. In November 2022 ChatGPT (OpenAI) arrived publicly, and that raised the risk to the search business. As Clayton Christensen, author of The Innovator's Dilemma, would put it, the search business suddenly carried much more risk. Alphabet launched its Gemini product a year later. The company now faces ChatGPT, Anthropic, Chinese models, and a growing list of rivals.
Looking at what Alphabet is really made of, the DeepMind team worked on AI for decades before most of the world knew about AI, and it has a culture of delighting users across its products. Predictive text in the search bar, which finished the word you were typing, is an early example. Marissa Mayer, around employee number 20, helped build that culture early, and it is part of what makes Alphabet unique.
Alphabet (GOOGL) now plays across the full stack: data centers (a capital-intensive infrastructure play), its own chips (TPUs), cloud, the AI models themselves, and wide distribution. It also owns YouTube and Waymo, assets well beyond paid search. The big open debate is how capital intensive the infrastructure buildout will be. Weighing likely winners and losers, I feel strongly that Alphabet is well positioned, and culturally well positioned, to succeed.
Which of its businesses is most underappreciated? It depends who you ask, since different investors focus on different parts. There is even a split between plain Google search and the AI overview that Gemini shows. That AI block at the top of a search result actually makes people search more: it gives more ideas and pulls users deeper into the search experience. At the core, the question is whether the original search revenue model stays defensible and whether the company can keep innovating to protect the revenue it has earned for years.
The pattern looks like Amazon (AMZN) a decade and a half to two decades ago, when it broke even for roughly 15 years while building its empire. The market treated Amazon's earnings as a faucet it could turn on whenever it chose - and it did. The same logic fits Alphabet (GOOGL): these are strong core businesses, Google Cloud growth is tremendous, and the company has simply chosen to invest heavily at a moment it sees as necessary. A patient owner of capital can look past the current spending and see a business one decision away from being a highly profitable free-cash-flow generator again.
I also compare it to Microsoft (MSFT), which I bought in 2003 when it was left for dead, enterprise model seen as at risk, and Steve Ballmer running it. Companies like Alphabet have strong footing in strategic areas, and the leadership and board are weighing the same questions investors are. That alignment, plus belief in Alphabet's mission, supports the case. The market appears to agree, since the stock has already seen a decent recovery.
