There are few shares that I think should be in every investors portfolio. Some shares are too risky for some people, some shares don’t pay a dividend, some shares don’t offer much growth and so on.
There are is a group of shares that I think ticks all of the boxes. In my opinion, here are three of them:
Altium Limited (ASX: ALU)
Altium is one of the world’s leading electronic PCB software businesses in the world. It provides software for engineers to create the items and products of the future. For example, it provides software for one-man engineer teams all the way up to NASA, Cochlear Limited (ASX: COH), BMW, Toyota, John Deere and so on.
I think it would suit every investor’s portfolio because it is heavily linked to the rise of the ‘Internet of Things’ which is predicted to grow exponentially over the coming years as everything becomes more technological and connected. Altium is generating significant growth even now.
It’s trading at 49x FY19’s estimated earnings, so today may not be the best time to buy.
Costa Group Holdings Ltd (ASX: CGC)
Costa is one of Australia’s largest food-growing businesses. It produces mushrooms, berries, citrus fruit, avocadoes and tomatoes. Food is an extremely essential service and it provides food almost all year round to its major supermarket customers.
The national and global populations will keep growing, increasing demand for food. It’s likely that our diets, particularly Asian diets, will increasingly want to include quality Aussie-grown produce. Costa is investing for growth by buying farms in different regions in Australia and internationally so it can supply food for longer periods of the year.
It’s currently trading at 28x FY19’s estimated earnings.
Challenger Ltd (ASX: CGF)
Challenger is Australia is largest annuity provider. It turns retiree’s capital into a guaranteed source of income.
I think that it would suit every investor’s portfolio because it’s one of the best ways to get exposure to the growing retirement population and also get exposure to the likely trend of more people wanting some of their assets invested in a ‘safe’ way to guarantee their retirement lifestyle.
It has already grown its annuity sales impressively over the past couple of years and in ten years’ time annuity sales could be significantly higher.
It’s currently trading at 17x FY19’s estimated earnings.
When investing in individual shares the best way to create strong returns is to invest for the long-term and be patient. There’s a good chance that over ten years the above three businesses will create excellent returns. However, in one year or two years the share price could be less than today.
If I could only pick one share today it would be Costa. Although it’s grown so much it still isn’t trading too expensively for the profit growth it’s generating.
Another share that could be good for every investor’s portfolio is this top stock which is predicting profit growth of 30% in this year alone.
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Motley Fool contributor Tristan Harrison owns shares of Altium, Challenger Limited, and COSTA GRP FPO. The Motley Fool Australia owns shares of and has recommended Challenger Limited and COSTA GRP FPO. The Motley Fool Australia owns shares of Altium. 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.