Billionaire investor Warren Buffett once said, "Games are won by players who focus on the playing field- not by those whose eyes are glued to the scoreboard."
Investors can be winners in the same way if they pay less attention to the rise and fall of the ASX and concentrate on quality companies that are steadily improving business. Since the beginning of the year, the S&P/ASX 200 Index (ASX: XJO) (Index: ^AXJO) has made a respectable 10.3% gain.
However, I know of two stocks that have more than doubled that increase and should continue growing over the next several years. Could they be good fits for your portfolio?
— Ansell Limited (ASX: ANN)
The protective wear and glove manufacturer had a strong rally over the past 12 months, up about 49%. The combined benefits of acquisitions, organic growth and recent restructuring lead to high-double digit growth in half-year earnings before interest and tax (EBIT), according to the company. Interim earnings per share and dividends rose 16% and 18%, respectively.
In March, Ansell announced yet another acquisition of UK-based Microgard, which specialises in chemical protective clothing. Microgard has production facilities in China and had about US$40 million in sales in 2014. Already a global leader in protective wear, Ansell's breadth of products for industrial uses will expand further with this acquisition. Long-term investors can benefit from having this steady grower and solid dividend payer in their portfolio.
Ansell 1-year stock chart
— Super Retail Group Ltd (ASX: SUL)
Retailers have slowly picked up sales momentum over the past year and Super Retail Group, the operator of Supercheap Auto, BCF, Rebel Sports and Amart Sports is no exception. Its sports stores have led the way in same store sales, up 6.1% in the first half. Auto accessories and parts followed with a decent rise, but outdoor and leisure equipment lagged.
The company expects its leisure division to improve as it restructures its Ray's Outdoors brand stores and closes its poorly performing FCO (Fishing, Camping, Outdoors) stores. The first part of the second half has seen this division's same store sales expand about 6.5%, so that's a good sign for total group sales to improve.
The stock pays a 3.8% yield fully franked and has recovered from a depressed share price since the start of the year. I would suggest picking up this stock as the further benefits of lower interest rates and cheaper petrol boost general retail trade.
Super Retail Group 1-year stock chart
Source: Google Finance
