Share prices change every day, indeed every minute, so different businesses can become opportunities in a matter of days.
The key thing to remember when investing is to choose a diverse portfolio of quality businesses. If you hold those quality companies for the long-term it should turn into good returns.
If I had $10,000 to invest today, this is how I’d invest it:
InvoCare Limited (ASX: IVC) – $3,000
InvoCare is the largest funeral operator in Australia. It has long-term growth prospects because Australia’s death rate is expected to rise over the coming years because of Australia’s ageing population. Sadly death (and taxes) is inevitable – at least for now.
I think the fact the InvoCare share price has dropped from $17.98 to today’s $12.62 makes it a good long-term buy. The price has dropped due to the US’ rising interest rates and because there is a lot of price competition in the UK, investors fear the same could happen here.
BWX Limited (ASX: BWX) – $2,500
BWX is the biggest natural beauty business in Australia. Its main brand is Sukin, although it has acquired a number of other brands in recent times which will hopefully allow it to expand into the large USA market.
The BWX share price has fallen from $8.08 to today’s $4.70 because growth wasn’t as high as expected in its recent half-year report. However, I think it has a long-term growth runway which should mean today’s price is good value.
Zenitas Healthcare Ltd (ASX: ZNT) – $2,000
Zenitas is a small cap healthcare operator that provides allied care, primary care and home care. I think allied care and home care are good investment opportunities because Australia’s population is ageing, the number of people over 65 is expected to grow by 75% in the next two decades.
Management are predicting organic growth will come in at 7.5% to 10% for FY18, which seems like a good result to me. The share price fall from $1.30 to today’s $1.05 means it could be trading at around 18x FY18’s estimated earnings.
Bapcor Ltd (ASX: BAP) – $2,500
Bapcor is Australia’s largest auto parts business with its Burson and Autobarn chains. I think Bapcor is a good opportunity because expect net profit after tax to grow more than 30% in FY18 yet it’s trading at under 24x FY17’s earnings. When shares trading with a PEG ratio of under 1 they are normally a good value idea.
I believe all three will soundly beat the market over the next three years at the current prices. If I had to choose two rather than four I’d pick Zenitas and BWX because I expect both to generate good growth over the next 12 months and 10 years.
Where to invest $1,000 right now
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Motley Fool contributor Tristan Harrison owns shares of Bapcor, BWX Limited, InvoCare Limited, and Zenitas Healthcare Ltd. The Motley Fool Australia owns shares of and has recommended Bapcor and BWX Limited. The Motley Fool Australia has recommended Zenitas Healthcare Ltd. 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 Scott Phillips.