OK I get it, I really do, as humans we are drawn to what we know and what do we know better than the big 4 banks? The problem with this approach is that as investors we are relying on, or perhaps a better word is hoping, that the big 4 will continue to grow as they have done in the past.
Now don’t get me wrong, if you had invested in the Commonwealth Bank of Australia (ASX: CBA) when it was floated on the ASX you would have done very nicely indeed. You’ve definitely earned the right to brag to your mates over a few beers about your Warren Buffett like skills. However, if you missed that boat, but you’re still considering throwing your money into one of the big 4, you need to ask will their earnings grow as strongly as they have done in the past?
Personally I believe as an investor it is far more profitable to seek out the blue-chip companies of tomorrow, rather than investing in companies which are much like my sporting career – well past its prime.
Aconex Ltd (ASX: ACX)
Aconex Limited provides a cloud-based platform for the global construction industry. The platform brings all stages and groups in the construction process into one easy to use program which enables the user to better monitor every stage of construction. What I like about Aconex software is that it not only fills a need but it can give companies an edge over competitors in cost and time savings. To date Aconex’s platform has been used in over 16,000 projects worth over $1 trillion in value across 70 countries.
WiseTech Global Ltd (ASX: WTC)
Very much like Aconex, Wisetech provides a cloud-based platform for the logistics industry which empowers the end users with greater visibility of their everyday processes. Through WiseTech’s CargoWise One software users are better able to monitor the movement and storage of goods. Currently WiseTech has over 6,000 customers and 150,000 module users across 7,000 sites in more than 125 countries.
What I really like about WiseTech is its high customer retention rates and high percentage of reoccurring revenue.
Reliance Worldwide Corporation Aus P Ltd (ASX:RWC)
Reliance designs, manufactures and supplies water flow and control products worldwide for the plumbing industry. Its products are used in residential and commercial applications, with many innovative world-leading designs.
What I particularly like about Reliance is its SharkBite range of plumbing accessories. This unique system not only saves on installation time, but is also so simple even a home handyman can install.
Where to invest $1,000 right now
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*Returns as of February 15th 2021
Motley Fool contributor Alan Edmunds owns shares of Aconex, Reliance Worldwide Limited and WiseTech Global. The Motley Fool Australia owns shares of WiseTech Global. 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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