Long-term investing isn't meant to be easy. If it were, everyone would do it and we wouldn't be presented with opportunities to buy great companies at great prices.
The best investors perform careful research into the current operations of a company, their competitors, future disruptive forces, growth opportunities, and management, not to mention the impact that valuation can have. This not only takes time to perform but also requires a lot of experience (and past mistakes to learn from) on behalf of the researcher.
Based on the analyst research I've read lately, these three companies are must haves for buy-and-hold long-term investors.
Flight Centre Travel Group Ltd (ASX: FLT)
The well-known Australian travel agency group has a network of over 2,000 stores around Australia, and a much smaller presence in the US and Europe. The company has managed to consistently grow earnings and dividends even though it maintains such a significant store network that competes with lower-cost online retailers. Flight Centre appears to have a sustainable competitive advantage over its Australian rivals and is forecast to grow earnings by nearly 50% over the next three years.
Crown Resorts Ltd (ASX: CWN)
Casino operator Crown has had a rough few months with concerns over Asian gaming growth clipping the share price to the order of 16%. The concerns have resulted in a 25% fall in the share price of Macau-based casino group Melco Crown, of which Crown owns 30%. Regardless of the concerns, Melco was able to grow earnings by 30% in the first half and there doesn't appear to be any genuine concerns that earnings could fall any time soon. Meanwhile, Crown is upgrading facilities in Melbourne and Perth and has new developments in the works in Sydney, Sri Lanka, and potentially Japan and the US. The next four to six years could be huge for Crown shareholders.
QBE Insurance Group Ltd (ASX: QBE)
The big Australian insurer QBE has been a horrible performer for long-term investors over the last three or four years. While the share price has barely moved, dividends have been cut and management have developed a tendency for not hitting earnings expectations. The new management team has started a turnaround program for the group's US operations and set realistic goals for 2014. If they can hit it, and build on a solid 2014 in future years, the current share price will look mighty cheap in five years' time.
