Buying high-quality companies and holding onto them over the ultra-long term is one of the greatest ways an investor can build their wealth. By acquiring shares when the company is in its early days – or when it is being sold at a significant discount – investors can sit back and watch as the company grows. They can also enjoy any dividends paid along the way, thus giving you a good chance at beating the returns of the S&P/ASX 200 (INDEXASX: XJO).
Investors should also remember the old Chinese adage that goes: "The best time to plant an oak tree was twenty years ago. The second best time is now."
As such, if I had $10,000 to invest in the stock market, here are four stocks which I would strongly consider buying (or topping-up on) right now…
1. Cover-More Group Ltd (ASX: CVO) is Australia's leading travel insurance business with an estimated 46% share of the local market. Despite there being a number of tragedies in the travel industry this year, high levels of international travel are expected to be sustained for the foreseeable future. The company recently announced revenue and earnings well in excess of prospectus forecasts, highlighting the strength of the business.
2. Nearmap Ltd (ASX: NEA) isn't a stock for the faint hearted given its small-cap status, but it could greatly reward investors who buy the shares today. Nearmap is a provider of geospatial map technology which is proving incredibly useful across various Australian industries – saving businesses time, costs and resources. Expansion into the United States is looking likely which could boost earnings substantially over the coming years.
3. Veda Group Ltd (ASX: VED) is another stock I believe is a strong buy right now. Although it trades on a slightly lofty P/E of 32.2x, Veda is a high quality business with fantastic growth prospects making it worth every cent. As a data analytics business, Veda should also continue to benefit from low interest rates, as well as from businesses becoming more and more cautious regarding who they extend credit to.
4. M2 Group Ltd (ASX: MTU) has been one of the ASX's greatest growth stories in recent years, having gone from a small-time telco to a $1.4 billion corporation. However, the stock has fallen considerably in the last few sessions, offering investors a fantastic point of entry. Currently trading at $7.49, the stock is also one for the income investor as it offers a grossed up 5% dividend yield.
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All of the companies mentioned above have the potential to deliver enormous returns over the coming years. While I currently own Nearmap and Veda Group shares, the others are pinging strongly on my radar.
