Brambles (ASX: BXB) is a fine example of a company that has 'stuck to its knitting'. While other firms race off and diversify into endless alternative segments and sectors, Brambles has focussed on doing one thing – pallet logistics –perfectly.
Other freight and logistics players certainly aren't in the sweet spot that Brambles is in. Toll Holdings (ASX: TOL) and Asciano (ASX: AIO) are primarily exposed to the lacklustre Australian market, while Brambles enjoys significant exposure to foreign markets. The differing revenue and earnings outlooks for these three firms have been reflected in their respective share price performances. While Brambles stock is up over 50% in the past 12 months, Toll and Asciano have both underperformed the S&P/ASX 200 Index (Index: ^AXJO) (ASX: XJO).
Foolish takeaway
Brambles is an example of a company that possesses a moat. Identifying companies with moat-like attributes and then waiting for an opportunity to purchase those businesses at a reasonable price is a tried and true way to build your wealth.
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Motley Fool contributor Tim McArthur owns shares in Toll Holdings.
