I'm always on the lookout for great wealth compounding businesses to add to my portfolio.
Last week there were some big updates from the ASX listed companies I watch and there are three in particular I'm zeroing in on.
WiseTech Global Ltd (ASX: WTC)
I'm watching logistics software company WiseTech Global closely after battling through the company's monster 78 page slide deck from last week's investor briefing.
WiseTech is targeting the highly fragmented logistics industry which is still in the early phases of using technology to create efficiency. This is an incredibly important factor as we buy more and more stuff online and the volume of low value items being transferred between boarders rapidly grows.
Wisetech's solves some of the key compliance and regulatory challenges that come with this growth and works 'out of the box' with little required set-up. For investors, this means highly efficient revenue growth with low marginal cost for adding new customers.
RESMED/IDR UNRESTR (ASX: RMD)
I have a lot of healthcare companies on my watch-list because of their historical market beating returns and typically strong pricing power.
Resmed certainly falls into this category and the recent third quarter update looked very positive. Excluding the impact of foreign exchange revenue increased 10% while net income jumped 25%.
This follows a strong second quarter and I see Resmed's growth being able to continue over the next few years. I should have bought shares in the company years ago, but would still be enticed to add the company to my portfolio today if the share price showed weakness.
Telstra Corporation Ltd (ASX: TLS)
Telstra shares are in a sorry state today and it's easy to see why. The dividend investors aren't seeing decent dividends and the growth investors aren't seeing any signs of growth. It's a terrible pitch.
But, as Howard Marks would argue, everyone knows that.
The contrarian argument, then, is that if everyone hates Telstra perhaps the company has been oversold as every fund manager and his dog abandons ship. Perhaps Telstra today is a bargain for investors with a long time horizon?
It is hard to know, but Telstra still retains strong cash-flows from its significant portfolio of quality assets. It will take a bit more digging to find out, but I'm keeping a close eye on the company in the meantime.
