The S&P/ASX 50 index is home to 50 of the largest shares on the Australian share market. These are predominantly household names and companies of true blue chip status.
While I wouldn't necessarily be buying all shares on the index, I think there are a few that could be strong buys. Here's why I would buy these three ASX 50 shares:
a2 Milk Company Ltd (ASX: A2M)
This infant formula and fresh milk company is the most recent addition to the ASX 50 index. It was included in the index at the June quarterly rebalance at the expense of financial services company AMP Limited (ASX: AMP). I think a2 Milk Company would be a great investment option due to its very positive long term outlook. This is thanks to the unquenchable appetite for its infant formula in China. Pleasingly, despite its incredible sales growth in the lucrative market, it still only has a consumption market share of 6.6%. I believe this gives a2 Milk Company a long runway for growth, which should be supported by its expanding fresh milk footprint and potential acquisitions/new product launches.
Cochlear Limited (ASX: COH)
Another ASX 50 share to consider buying is this hearing solutions specialist. Like a2 Milk Company, I think Cochlear also has a very positive long-term outlook. This is due to ageing populations and the fact that hearing tends to fade as people get older. I expect this to lead to strong demand for its high quality products over the next couple of decades and drive consistently solid sales growth. Another positive is its high level of investment in R&D and the industry's high barriers to entry. I expect this to keep Cochlear as an industry leader for a long time to come.
Ramsay Health Care Limited (ASX: RHC)
A final ASX 50 share to consider buying is Ramsay Health Care. Although the private hospital operator's near term growth is likely to be subdued, I continue to believe that its long term outlook is very positive. This is because Ramsay's world class network of 480 facilities across 11 countries are well-positioned to benefit from the expected growth in demand for healthcare services over the next couple of decades. In addition to this, the company has a long history of making earnings accretive acquisitions. I expect more acquisitions to be made in the coming years. Combined with organic growth, this should lead to solid earnings growth over the long term.
