4 shares you’d love to buy, but shouldn’t

Although the performance of the S&P/ASX 200 (Index: ^AXJO) (ASX:XJO) over the past couple of years has been somewhat disappointing, it is important for investors to remember that the index is dominated by a few big names and that many of the shares that do not have big weightings in the index have performed quite well.

This has made finding bargains that little bit harder and I think investors need to remain patient when it comes to buying shares that are trading at big premiums to the broader market.

With that in mind, I have identified four top-performing shares that I believe would be great additions to any portfolio – at the right price.

CSL Limited (ASX: CSL)

CSL is undoubtedly one of the best blue chip shares on the ASX and its long term track record backs this up. The biotechnology company has consistently increased its earnings per share (EPS) year-after-year and this has translated into an average annual return for shareholders of 23.4% over each of the past 10 years. With such an impressive track record and a robust pipeline of new products nearing commercialisation, it is unsurprising that the shares are trading near record highs. Whether the shares offer good value at the moment is debatable, but a significant pullback from here would certainly earn CSL a spot in my portfolio.

Ramsay Health Care Limited (ASX: RHC)

Ramsay Health Care is another great Australian healthcare company that has been able to deliver great returns for shareholders over a long period of time. Like CSL, Ramsay Health Care has been able to take its business to the next level by expanding into overseas markets via acquisitions and through organic growth. The private hospital market is an attractive market for investors to be exposed to and I think Ramsay Health Care is well placed to prosper for many years to come. The shares are not particularly cheap, trading at 33x earnings, but I think it would take something drastic for the shares to fall significantly from here.

WAM Capital Limited (ASX: WAM)

The listed investment company (LIC) has significantly outperformed the broader market since its inception thanks to the ability of its fund managers to identify shares that have been able to grow earnings at a much faster rate than the broader market. Earlier this week, WAM Capital announced its full year results that showed an 85.7% increase in full year profits on the back of a 21.6% increase in the investment portfolio. 

TPG Telecom Ltd (ASX: TPM)

With a market capitalisation now worth more than $10.6 billion, TPG is growing into a company that could have the scale and capabilities to compete with the likes of Telstra Corporation Ltd (ASX: TLS). The fast growing telco has continued to perform above market expectations and has been a big beneficiary from the consolidation that has recently occurred within the industry. There is continued speculation that TPG could make a play for Vodafone Australia, but even if this does not eventuate, I think the company is still likely to deliver above average earnings growth for the foreseeable future.

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Motley Fool contributor Christopher Georges 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.

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