I want to only own ASX stocks in my superannuation fund that I believe have long-term futures and could deliver strong returns. Superannuation is meant for funding retirement, so accessing it is decades away for me.
Having more time for an investment to play out well is positive because it gives the ASX stock the ability to compound over a long time.
No one knows what will happen in the next few years, but I believe some companies could keep growing earnings and their underlying value significantly because of their defensive operations. I recently invested in one ASX stock, and I'm excited about another idea. Let's take a look.
Tuas Ltd (ASX: TUA)
Tuas is a rapidly growing Singaporean telecommunications company with a current focus on providing good value services.
I recently invested in this ASX stock, following my first investment several weeks ago.
Tuas has already built a good market position in the Asian city-state, with just over 1 million mobile subscribers, thanks to regular double-digit percentage growth each year. This is helping drive the financial metrics in the right way.
For FY24, Tuas reported revenue growth of 36% to $117.1 million and operating profit (EBITDA) growth of 60% to $49.7 million. As you can see, the company is delivering operating leverage, where profit margins are increasing.
I think the business is capable of growing into overseas markets such as Malaysia or Indonesia, which would significantly increase the company's growth runway.
In FY25, the ASX stock is targeting mobile subscriber growth and capital expenditures of between $45 million and $55 million on mobile and broadband offerings. It's aiming for full-year positive net profit after tax (NPAT) and it also wants to grow its broadband customer base in Singapore – it had 4,000 subscribers at the end of FY24.
I expect to invest in Tuas shares again before the end of 2025.
Brickworks Limited (ASX: BKW)
I already own Brickworks shares in my superannuation fund and I'm close to making it my next investment for retirement.
The business may be best known for its building products in Australia and the US, such as its leading position in bricks, where building conditions have been weak. But, with a cyclical industry like construction, I think it can be wise to buy when conditions are weak (not when they're strong).
I'm particularly attracted to this ASX stock because of its strong asset base that is growing in value over the long term.
For example, it owns approximately a quarter of investment house Washington H. Soul Pattinson and Co. Ltd (ASX: SOL) which, in turn, owns a diversified portfolio across assets including ASX shares, private equity, credit/bonds and property. This investment is providing steadily rising dividends and a growing portfolio value with its investments collectively growing earnings and cash flow.
Brickworks is also benefiting from its ownership of half of an industrial property trust alongside Goodman Group (ASX: GMG). The property trust is building new, large warehouses with blue-chip tenants. These new properties are increasing the value of the land and unlocking rental profit and cash flow.
I think the Brickworks share price is trading cheaply for the impressive value on the Brickworks balance sheet.
