Some investors find a thrill in constantly buying and selling stocks and they can feel like a genius when share prices move in their favour.
But in reality, those investors could actually be inflicting a lot of damage to their long-term wealth, what with the taxes and brokerage fees they’re accruing along the way, quickly eating away at any gains recognised on their trades.
There’s a key difference between these traders and ‘Foolish’, long-term investors. Traders are constantly looking for the next thrill or ‘get-rich-quick-scheme and investing in ticker codes, simply hoping that prices move in their favour in the short-term. Investors, on the other hand, invest in companies with solid foundations and are, more often than not, required to simply sit on their hands and do nothing.
A $73 billion lesson
Warren Buffett is widely regarded as the world’s most successful investor of all time. When he graduated from college, he had roughly US$10,000 to his name. Now, he’s the world’s third richest person with a net worth of nearly US$73 billion.
Buffett made his fortune by investing in high-quality companies for the ultra-long term (indeed, his ideal holding time is forever). In fact, so irrelevant are short-term movements to Buffett that he was once quoted as saying: “Only buy something that you’d be perfectly happy to hold if the market shut down for 10 years.”
Obviously, that mindset requires a high level of conviction and requires greater research to ensure you’re comfortable with the companies you own. With that in mind, here are 10 ASX companies that deserve your attention today which could make for excellent set-and-forget stocks for the long haul.
10 buy-to-hold stocks for your portfolio
- Burson Group Ltd (ASX: BAP) operates in Australia’s automotive aftermarket parts industry, which is experiencing strong growth (a trend set to continue over the coming years). With a highly competent management team and an expanding network, Burson is in a box-seat position to benefit in the long term.
- Coca-Cola Amatil Ltd (ASX: CCL) has endured a tough run in recent years but looks to have turned the ship around. Management expects a return to earnings per share (EPS) growth with investors set to benefit in the form of capital gains and rock-solid dividends.
- oOh!Media Ltd (ASX: OML) is Australia’s largest out-of-home media company, offering advertising spaces on roadside billboards as well as within various other locations such as airports and shopping centres. While growth in other traditional media platforms (e.g. free-to-air TV) is slowing, out of home advertising is growing and oOh!Media is in a prime position to benefit.
- Woolworths Limited (ASX: WOW) shares are hovering near a three-year low, offering long-term investors a great opportunity to buy. A change in leadership should bode well for investors as the retailer looks to recover its lost market share. At $27.39 per share, Woolworths also offers a compelling 5.1% fully franked dividend yield.
- Flight Centre Travel Group Ltd (ASX: FLT) shares were slammed last week following a profit downgrade in what seems to have been a considerable overreaction from investors. With plenty of growth potential locally and internationally, Flight Centre is certainly one worth your consideration.
- Japara Healthcare Ltd (ASX: JHC) is a residential aged care operator which recently listed on the ASX. Given the projections for Australia’s population to continue growing and ageing, Japara’s services should be in high demand in the years to come.
- Somnomed Limited (ASX: SOM) specialises in continuous open airway therapy (COAT) for the treatment of various sleep-related breathing disorders, including sleep apnea. Although it is competing against companies such as ResMed Inc. (CHESS) (ASX: RMD) and Fisher & Paykel Healthcare Corp Ltd (ASX: FPH), its products are considerably cheaper and less invasive, putting it in a good position to increase its market share.
- 1-Page Ltd (ASX: 1PG) is the riskiest stock on this list, but could generate fantastic returns for investors if everything goes according to plan. 1-Page provides a cloud-based human resources software-as-a-service platform and could single-handedly change the way in which businesses hire and promote staff. Some investors may want to remain on the sidelines until 1-Page can prove its worth, but it is definitely a stock worth watching.
- Collection House Limited (ASX: CLH) is a debt collection agency with a fantastic track record for growing earnings and dividends. At $2.21, it appears as though the market is still underestimating this company’s growth potential, giving long-term investors a perfect opportunity to buy.
- XERO FPO NZ (ASX: XRO) is a pure cloud-based accounting software provider which is becoming increasingly popular amongst accountants. Although it is not yet profitable, it is pumping cash into marketing and development to ensure its future dominance within the market and early shareholders could make a handsome profit.
The Motley Fool Australia owns shares of Burson and Xero. 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.