MENU

SEEK, CSL and Ramsay Health Care: Fast growing companies to buy today

Warren Buffett, one of the richest men in the world, once said about the value and quality of companies –

It’s far better to buy a wonderful company at a fair price than a fair company at a wonderful price.

Quality companies have characteristics that keep the business growing while protecting it from becoming a commodity producer that discounts to survive.

If a strong company is growing earnings by, let’s say, 20-25% annually, then it can be worth it to pay a premium price, so investors shouldn’t be scared of price/earnings ratios around 25 – 30. During market sell-offs when those PE ratios get crushed down to the teens or low 20s, the company itself may not change that much. That’s when you can increase your position at a wonderful price.

With that in mind, here are three stocks that combine both growth and quality.

SEEK Limited (ASX: SEK) dominates the online jobs listings business in Australia, attracting the most employers and applicants to its seek.com.au website. Revenue and earnings growth have been strong over the past four years and FY 2014 looks to be following suit with underlying net profit up 29% in the first half.

CSL Limited (ASX: CSL), the biopharmaceutical company that develops products and treatments for viral, bacterial diseases and blood disorders has created a strong market presence in Australia, yet gets most of its revenue from the U.S. and Europe. Some analysts project its earnings to increase over the next few years at a good pace, matching its past five-year growth trend.

Ramsay Health Care Limited (ASX: RHC) may not have the high profit margins of the two above, but it makes up for it in growth. The private hospital operator has been acquiring hospitals and medical facilities both domestically and internationally in Europe and South East Asia.

It also develops its existing facilities to increase surgery and bed space to maximise their revenue potential. Underlying net profit has increased annually in the last eight years. Growth into China is one of its objectives because of the high population and health care demand.

A Billionaire's Investing Secrets - and 2 New ASX Ideas for You

We have two more quality companies that could have the value a billionaire investor would want. Now you can discover the investing secrets of $60 BILLION man Warren Buffett -- widely recognized as the world's greatest investor. Plus, you'll get two brand new ASX ideas! Your copy of The Motley Fool's brand-new report "The Wisdom of Warren Buffett -- Plus 2 ASX Shares Buffett Could Love" is FREE when you click here.

Motley Fool contributor Darryl Daté-Shappard does not own shares in any company mentioned. 

Two New Stock Picks Every Month!

Not to alarm you, but you’re about to miss a very important event! Chief Investment Advisor Scott Phillips and his team at Motley Fool Share Advisor are about to reveal their latest official stock recommendation. The premium “buy alert” will be unveiled to members and you can be among the first to act on the tip.

Don’t let this opportunity pass you by – this is your chance to get in early!

Simply enter your email now to find out how you can get instant access.

By clicking this button, you agree to our Terms of Service and Privacy Policy. We will use your email address only to keep you informed about updates to our website and about other products and services we think might interest you. You can unsubscribe from Take Stock at anytime. Please refer to our Financial Services Guide (FSG) for more information.