The stock market is generally expensive at the moment, it's very hard to find bargains. Therefore, I believe the best strategy is to buy quality companies at reasonable prices, which should still lead to outperforming the market.
Here are five shares I believe would make good long-term buys today:
BWX Limited (ASX: BWX)
BWX is Australia's leading natural skincare company, it owns the Sukin range and several other brands.
Consumers are steadily changing to beauty options that are better for the environment and themselves. Sukin is generating excellent growth both here and overseas in large markets like the UK and Canada.
I think BWX could be a good long-term growth choice because it has recently acquired two US natural beauty companies which will allow BWX to sell Sukin into the US. Those two US businesses should grow well on their own too.
BWX is currently trading at 28x FY18's estimated earnings.
Zenitas Healthcare Limited (ASX: ZNT)
Zenitas is a leading healthcare provider offering services at home, as well as allied and primary healthcare options.
The government is making a lot of noise about how it wants to reduce healthcare spending, with hospitals one of the highest-costing areas. Zenitas is building a strong alternative to this and could become a blue chip over the coming decade, helped by the ageing tailwinds.
Zenitas is currently trading at 12x FY18's estimated earnings.
Costa Group Holdings Ltd (ASX: CGC)
Costa is one of Australia's largest fresh food producers. It grows berries, tomatoes, mushrooms, citrus fruit and avocadoes across the country.
Fresh food is an important commodity and one that should become increasingly valuable as population growth occurs and eating habits change. Many investors likely don't have much food exposure, so I think Costa would be a good buy in this space.
Costa is currently trading at 24x FY18's estimated earnings.
WAM Microcap Limited (ASX: WMI)
WAM Microcap is one of the listed investment companies (LICs) run by Wilson Asset Management. Since listing in June, the WAM Microcap portfolio has returned 27.2% which is an amazing performance for six months.
I don't expect the next six months, or the long-term performance, to be as good but I do expect the LIC to outperform the market quite convincingly and deliver excellent income. I would be very happy for more of my portfolio to be devoted to this LIC.
Some investors are uncertain about Bapcor's long-term future, but in the near future I think it could make a lot of money for shareholders due to its impressive organic growth, planned store expansion, profit margin growth and the potential to grow into Asia.
On top of all that, management are predicting that the auto parts leader will grow net profit after tax (NPAT) by 30% in FY18, yet it's only trading at 25x FY17's earnings.
Foolish takeaway
It's hard to pick one as a clear favourite, but if I could choose two it would probably be Zenitas and WAM Microcap. Both are trading at good value compared to their peers and I think the underlying businesses will easily grow by more than 10% a year.
