After seemingly being on the cusp of charging through the 6,000 mark, the ASX 200 has come crashing back down and retreated nearly 200 points in three days. No one knows where the index will end up tomorrow or in a week’s time, but with the benefit of hindsight we can quite safely say that over time the market trends upwards.
What does this mean? It means that long-term investors will be handsomely rewarded for riding out the sporadic fits of Mr Market, and any market weakness could present the perfect opportunity to pick up great companies at a good price.
Below are three companies that I’m keeping on my watch list.
CSL Limited (ASX: CSL)
CSL is one of many standout healthcare companies that have achieved great success on the global market. Its continual focus on innovation has led to it becoming the leading manufacturer in the $7.5 billion plasma market. Whilst the company is expected to continue reaping the rewards of being a market leader, it has ventured into other fields to broaden its market. For example CSL is set to become the second largest player in the global influenza vaccine industry, with many analysts expecting strong future growth. If this is not enough to whet your appetite the company is very shareholder friendly, regularly returning excess funds to shareholders.
Brambles Limited (ASX: BXB)
As a leading pooling solutions provider of reusable pallets and containers, Brambles is exposed to a wide base of customers spanning various regions and industries in the fast moving consumer goods (FMCG) industries. This provides a stable and defensive revenue stream that will continue to grind higher as the global population increases. Even more important is the fact that over time the company has become an integral part of its customer’s operations, creating a competitive advantage for itself that will continue to reward shareholders.
Veda Group Ltd (ASX: VED)
Continuing in the theme of favouring market leaders, Veda commands a monopolistic position in the credit data analytics business in Australia. Its products are exceptionally valuable to various stakeholders. For example lenders would be interested in an individual’s credit history, when assessing whether to issue a credit card, whilst landlords might be interested in the company’s tenancy check reports to see how promptly a prospective tenant has paid rent. Although on the face of it Veda’s business sounds very cyclical its earnings have actually been defensive, registering 20 years of consecutive growth.
The market might throw a curve ball and smash through the 6,000 mark next week should the RBA cut interest rates on Tuesday, in which case you might wish to keep your powder dry on these stocks. However the analysts at the Motley Fool have unearthed what it believes to be the top stock of the moment, so do yourself a favour and read the below now…
5 stocks under $5
We hear it over and over from investors, "I wish I had bought Altium or Afterpay when they were first recommended by The Motley Fool. I'd be sitting on a gold mine!" And it's true.
And while Altium and Afterpay have had a good run, we think these 5 other stocks are screaming buys. And you can buy them now for less than $5 a share!
*Extreme Opportunities returns as of June 5th 2020
Motley Fool contributor Simon Chan has no position in any stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.