A stock could be a 'no-brainer' buy for a few reasons. One reason would be because it was a screaming bargain – such as those rare occasions you find a stock selling for substantially less than the value of cash on its balance sheet.
In the following three cases the stocks are not outright bargains but they are another form of 'no-brainer'. They're the types of businesses that enjoy moats which give their businesses pricing power and longevity to withstand competitive pressures. These moats can come in different forms and include monopoly assets, niche products or services, lowest cost positions and brand name power.
Here are three stocks which look to me like no-brainer businesses to buy – if you can purchase them at an attractive price.
1) Computershare Limited (ASX: CPU) is a leading provider of investor registry services. Its scale gives the firm the ability to offer the lowest cost to provide the widest range of services to its clients. The firm also enjoys high switching costs. Computershare has expanded internationally which has allowed it to utilise its software, processes and systems on a global scale and to bolt on rivals which provides synergies and acquisitive growth.
2) InvoCare Limited (ASX: IVC) is a leading provider of funeral services in Australia, New Zealand and Singapore. As I stated here there are many appealing aspects to InvoCare's business model including its entrenched market position which discourages competitors.
3) Transurban Group (ASX: TCL) manages and develops toll road networks in Australia and the USA. The firm has in recent years successfully expanded its asset base which should help secure future growth. The nature of toll roads is that they provide reliable cash flow and are quasi-monopoly assets which make them very appealing defensive investments for a long-term portfolio.
