When looking for buy and hold options, I think the healthcare and information technology sectors are a great place to start.
This is because I believe there are a number of shares in these sectors that have significant growth potential that could lead to them delivering outsized returns over the next decade at least.
Three top shares that I would consider as buy and hold options are listed below:
Appen Ltd (ASX: APX)
Appen is the global leader in the development of high-quality, human annotated datasets for machine learning and artificial intelligence. It has a global crowd of over 1 million skilled contractors and the industry’s most advanced AI-assisted data annotation platform. Given the importance of data for machine learning and artificial intelligence, demand for its services has been growing incredibly strongly. As a result, it is expecting to deliver underlying EBITDA growth of 34.6% to 38.8% in FY 2019. And with the machine learning and artificial intelligence markets expected to grow materially in the future, I feel confident it can continue its strong form throughout the 2020s.
Nanosonics Ltd (ASX: NAN)
Another top buy and hold option for investors to consider is Nanosonics. It is a leading infection control specialist best-known for its industry-leading trophon EPR disinfection system for ultrasound probes. Demand for the trophon EPR product has been growing strongly in recent years. This has not only led to strong unit sales, but also strong recurring revenues from the consumable products it requires to function. Pleasingly, the product still has a significant runway for growth, which I expect to underpin strong earnings growth in the 2020s. This should be boosted by the upcoming launch of new products targeting unmet needs.
REA Group Limited (ASX: REA)
A final buy and hold option to consider is this property listings giant. I think it could be a great long-term investment due to its dominant position in the ANZ market and its growing international operations. In respect to the ANZ market, the recent rebound in the Australian housing market looks set to be a boost to its earnings in the medium term. I expect demand for listings to increase in the second half. Combined with price increases and new revenue streams, REA Group looks well-placed to grow its earnings at an above-average rate from FY 2021 onwards.
These 3 stocks could be the next big movers in 2020
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Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended Nanosonics Limited. The Motley Fool Australia owns shares of Appen Ltd. The Motley Fool Australia has recommended REA Group Limited. 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.
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