The last 18 months has demonstrated that it's now more important than ever to ignore short-term volatility and instead focus on the long-term prospects of a business.
There are no better examples of that thinking than these two S&P/ASX 200 Index (ASX: XJO) examples, which Seneca Financial Solutions investment advisor Arthur Garipoli rates as buys:
Image source: Getty Images
'Positive view' on health devices giant
Healthcare is one of those industries that don't fare too badly even through times of economic stress.
That's because people will, understandably, prioritise their physical and mental wellbeing over other goods and services.
As such, a leader in its field like Resmed CDI (ASX: RMD) makes a sensible buy.
"This manufacturer of medical devices for respiratory disorders recently reported results that beat market expectations," Garipoli told The Bull.
"Revenue of US$1.0337 billion for the three months ending on December 31, 2022 was up 16% on the prior corresponding period."
The hardware company did encounter some roadblocks to growth last year as a global computer chip shortage hampered its own production.
But that short-term issue, Garipoli feels, is now past it.
"We retain a positive view on RedMed, given an improving supply chain," he said.
"It will enable ResMed to meet additional demand for respiratory units, leading to revenue growth."
The ResMed share price is 8.9% up over the past year.
Excellent dividend yield plus cheap share price
Deterra Royalties Ltd (ASX: DRR) is a mining royalty company, meaning it's almost like a landlord collecting rent from sites where resource companies are operating.
This model has some advantages over directly owning mining shares, according to Garipoli.
"Deterra holds a 1.232% royalty in BHP Group Ltd (ASX: BHP)'s Mining Area C (MAC) involving iron ore operations in the Pilbara region of Western Australia," he said.
"It gives Deterra price and volume exposure to a world class asset without taking on mining risk."
Garipoli noted that the first half update showed BHP increasing production at the MAC site.
"We believe the stock is undervalued due to the quality of the asset, its discount to peers and providing investors with a forecast fully franked dividend yield of 6.6%."
The Deterra share price has remained flat over the past year and so far in 2023.
