At the beginning of a new year, I like to narrow my focus rather than expand it. Instead of looking at dozens of ASX stocks, I concentrate on a small group of businesses I would genuinely be happy to own for the long term.
These are companies with proven models, clear growth pathways, and management teams that have shown they can execute. They are not risk-free, but they are businesses I believe have the right foundations in place.
With that in mind, here are five ASX stocks that stand out to me as 2026 gets underway.
Sigma Healthcare Ltd (ASX: SIG)
Sigma has quietly become a very different business over the past year.
The merger with Chemist Warehouse has created a vertically integrated healthcare group with scale across wholesale distribution, franchising, and retail. With hundreds of pharmacies under its umbrella, Sigma now sits at the centre of Australia's community pharmacy network.
Healthcare demand is structural rather than cyclical, which gives Sigma resilience. As integration benefits flow through and scale advantages are realised, I think this ASX stock has the potential to deliver robust growth into 2026 and beyond.
TechnologyOne Ltd (ASX: TNE)
TechnologyOne is another ASX stock that I would consider buying in 2026.
Its enterprise software is deeply embedded in government, education, and large organisations, where switching costs are high and contracts are long-dated. The ongoing transition to a SaaS model has improved revenue visibility, while its international expansion provides an additional growth lever.
It's not a flashy stock, but it's exactly the kind of business I want exposure to when markets start rewarding reliability again.
Wesfarmers (ASX: WES)
Wesfarmers could be a key long-term portfolio holding.
With its Bunnings, Kmart, Officeworks, and healthcare businesses, Wesfarmers benefits from diversification and disciplined capital allocation. Management has repeatedly shown a willingness to reshape the portfolio and reinvest where returns look attractive.
As conditions normalise in 2026, I see Wesfarmers continuing to compound steadily.
Lovisa Holdings Ltd (ASX: LOV)
Lovisa brings a different dynamic to the mix.
It's a globally scaled specialty retailer of fashion jewellery with a fast-moving store rollout model and a clear focus on return on capital. While retail can be volatile, Lovisa's international footprint and ability to quickly adapt ranges and pricing give it more flexibility than most.
If consumer confidence improves in 2026, Lovisa could benefit from both operating leverage and continued store expansion across global markets.
DroneShield Ltd (ASX: DRO)
DroneShield is the highest-risk stock on this list, and potentially the highest reward.
The company operates in counter-drone technology, a market that is becoming increasingly important for defence, government, and critical infrastructure. While contract timing can make results lumpy, the underlying demand drivers are structural, not cyclical.
As global defence spending remains elevated, DroneShield's technology and growing customer base could position it well heading into 2026, provided execution continues.
