If you’re in the process of constructing a $100,000 share portfolio, you may be on the lookout for investment ideas.
To help you on your way, I have picked out a few shares I think could be excellent core holdings.
Here’s why I think investing some of the funds in these shares would be a very smart move:
Appen Ltd (ASX: APX)
The first option to consider as a core holding is Appen. It is the global leader in the development of high-quality, human annotated datasets for machine learning and artificial intelligence (AI). It has achieved its leadership position thanks to its global crowd of more than 1 million skilled contractors. This, together with an expertise in more than 180 languages and the industry’s most advanced AI-assisted data annotation platform, means it is servicing the needs of some of the biggest tech companies in the world. This includes the likes of Facebook and Apple.
The good news is that spending on machine learning and AI is expected to increase materially in the future. I believe this puts Appen in a strong position to continue growing its earnings at an above-average rate for many years to come.
Coles Group Ltd (ASX: COL)
Another option for investors to consider as a core holding for their portfolio is Coles. I think it could be a great option due to the solid growth potential it has thanks to its defensive earnings, expansion opportunities, and its refreshed strategy. The latter is aiming to deliver $1 billion in cumulative savings by FY 2023. These savings are expected to come from the use of technology to automate manual tasks. This includes state of the art automated distribution centres.
Another positive is the company’s dividend policy. Coles intends to payout upwards of 90% of its earnings to shareholders each year. Given its positive long term growth outlook, I expect this to lead to increasing dividend payments for a long time to come.
I think this biotherapeutics company would be a great core holding. I believe CSL is well-positioned to continue growing its earnings at a solid rate long into the future once the pandemic passes. This due to its world class portfolio of therapies and vaccines and its potentially lucrative research and development pipeline. In respect to the latter, CSL invested ~US$900 million into these activities in FY 2020 and will invest approximately US$1 billion this year.
I believe these investments will ensure that CSL stays at the top of its field for a long time to come. All in all, this could make it one of the best buy and hold options on the market today.
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Returns as of 6th October 2020
James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. owns shares of CSL Ltd. The Motley Fool Australia owns shares of Appen Ltd and COLESGROUP DEF SET. 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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