The buy and hold strategy of investing has proven to deliver greater returns in the long-run than the returns recognised by more frequent traders.
Given there is no possible way of predicting the market's mood or how any specific stock or sector will perform on a given day, it is likely that over time, frequent traders will recognise below-par returns (or even losses). You could recognise far greater gains by investing in quality companies that are trading at discounted prices. Then hold them for the long-term to take advantage of their growth and dividends paid.
There are currently a number of companies that appear to be trading 'under-the-radar' of investors. This gives those willing to dig a little deeper the opportunity to buy at discounted prices. If bought to hold, I think these three companies could deliver fantastic gains:
Collection House (ASX: CLH): Collection House is in the receivables management business (debt collection, to you and I), with its core businesses including purchased debt as well as commission collections. The company is led by a strong management team and reported a 23% increase in net profit after tax for the full-year in August. It is currently trading in bargain territory at $1.83 per share with a P/E ratio of 13.2. It might be time to add this company to your collection today.
Myer (ASX: MYR): The department store giant is currently trading at $2.76 per share and is also trading with a P/E ratio of 13 and offers a 6.4% fully-franked dividend. Many investors have shunned Australia's retailers in recent times due to concerns regarding consumer confidence as well as the rapid rise of the online retail sector. However, Myer continues to increase its online exposure and should benefit from the low interest-rate environment and increasing market confidence.
Twenty-First Century Fox (ASX: FOX): In October last year, Deutsche Bank analysts upgraded their 12-month price target for the business, forecasting shares to climb to around $45. Compared to today's price of $38.54, that's still 16.8% below Deutsche Bank's target. However, investors should look beyond the one-year price target and look at its potential to grow substantially in the long-term, as it attempts to increase its exposure to developing markets.
Looking for long-term growth and a great dividend?!
