Investing and holding for the long term is the best way to go, in my view, because it means giving the ASX shares a long time to compound, while also reducing tax payments.
I'm going to look at two ASX shares that could be excellent investments to own for the years ahead because of their strong underlying growth and the fact the share prices are cheaper than they used to be.
Below are two of my favourite ideas for long-term returns.
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Sigma Healthcare Ltd (ASX: SIG)
Sigma is a business that's heavily involved in the pharmacy industry as both a chemist brand owner and product distributor. Its key business is Chemist Warehouse, which I'd describe as the leading operator in the sector.
The business recently announced an update that included a number of positives that I think makes it an even stronger buy.
Firstly, Chemist Warehouse's sales remain incredibly strong.
Australian Chemist Warehouse-branded stores saw network sales growth of 16.7%, powered by 14.4% like-for-like (LFL) sales growth. The international division, which includes Ireland, New Zealand, Dubai, and China saw overall sales growth of 24.7%, with LFL growth of 11.8%.
The fact the core business continues to perform so strongly is very positive for the foreseeable future, in my opinion. I believe investors should never lose sight of the performance of the key element of a company's earnings, even if it has exciting growth plans for new products or services.
Second, the ASX share announced that Chemist Warehouse is entering the UK by acquiring 75% of a number of Greenlight stores which are based in London. Chemist Warehouse will licence the Chemist Warehouse brand and intellectual property and provide retail support, including ranging, store layout, inventory management, and marketing support.
Some of the Greenlight locations will be developed or relocated, becoming Chemist Warehouse stores. The first phase will focus on rebranding and developing up to five stores initially. If this proves successful, more stores could be developed.
Finally, the company is investing in a new distribution centre in New Zealand, which will help it continue growth in that market. It's aiming for more than 100 Chemist Warehouse stores in New Zealand in the long term, where there's currently approximately 70.
All of the above bodes well for the ASX share's long-term future. The UK is a big market and could be a great growth driver in the years ahead.
L1 Global Long Short Fund Ltd (ASX: GLS)
I believe every Australian would benefit from having a good allocation to international shares, though the international/US share market is increasingly becoming a bet on a few large US tech names and the theme of AI in general.
There are plenty of appealing investments in the international market, which could deliver strong returns.
Instead of trying to search across the entire global share market for great ideas, I'm very willing to have high-performing fund managers provide the diversification and returns I'm after.
L1 Global Long Short Fund is a listed investment company (LIC) that utilises both long-term investing and short-selling to find opportunities. Some of the sectors it's invested in recently includes copper, gold, construction materials, and banking.
According to the fund manager, the ASX share's median 'long' position trades at around 8x FY27's estimated earnings, with double-digit earnings growth and modest debt levels.
Past performance is not a reliable indicator of future returns, but since the strategy's inception in January 2025, it has returned an average of 53.9% per year. I think this ASX share is one worth watching.
