With all the turmoil surrounding the ASX at the moment and the recent strong share price declines across the market, it's important to remember that investing is very much a long-term strategy.
With that in mind, let's take a look at the best performing ASX 20 share over the past 12 months.
CSL leads the ASX top 20
The CSL Limited (ASX: CSL) share price has lost some ground over the past 2 weeks due to the current market correction, which began on 20 February. Since then, as the global threat of the spread of coronavirus has become more serious, CSL's share price has dropped by 10% at the time of writing. However, over the past year, CSL shares have risen by an impressive 51%, even when this recent share price correction has been factored in.
In addition, CSL's recent fall is actually well below the S&P/ASX 200 (INDEXASX: XJO) market average over the same period. It's also significantly less than the share price falls experienced by some of the other major ASX healthcare shares such as Cochlear Limited (ASX: COH), which is seen to have a more direct link to the slowdown in business activity in China. Cochlear downgraded its guidance earlier this month due to an expected impact from the coronavirus in Greater China and has been impacted as hospitals across the region have been deferring surgeries, including for cochlear implants, to limit the risk of infection.
Rising market presence over the past two decades
Over the past 2 decades, CSL has gone from strength to strength, and has evolved from a small federal government department back in the 1990s to the global healthcare giant it is today. With a market capitalisation of around $136 billion at the time of writing, it has recently overtaken Commonwealth Bank of Australia (ASX: CBA) to become the ASX's largest company by market capitalisation. I think that few market commentators 5 years ago would have predicted that this would have happened.
The top 5 of the ASX for the past decade or so has been dominated by the 4 big banks – Commonwealth Bank, Westpac Banking Corp (ASX: WBC), National Australia Bank Ltd (ASX: NAB), Australia and New Zealand Banking Group (ASX: ANZ) – and our biggest miner BHP Group Ltd (ASX: BHP).
What has driven CSL's strong growth?
CSL's significant investment into research and development creates a continual pipeline of new and innovative products, which provides additional revenue streams and creates a strong competitive barrier against further competition. Equally important, CSL has a proven track record in selecting the right areas to invest in.
CSL is well-positioned to continue to deliver strong growth into the future, driven by a continued fast-growing plasma collection network, and a steadily increasing global demand for immunoglobulin products.
