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Why I would buy and hold CSL and these ASX shares for a decade

James Mickleboro
ASX Investment Manager

I think that one of the best ways to generate wealth is to invest with a long-term view.

After all, over the last 30 years the Australian share market has generated an average return of 9.1% per annum according to research by Fidelity.

This means that a single $10,000 investment would now have grown to be worth $135,000 if it earned the market return over the last three decades.

With that in mind, here are three top shares that I think would be great buy and hold investments:

a2 Milk Company Ltd (ASX: A2M)

One of my favourite buy and hold options on the local market is this infant formula and fresh milk company. This is due largely to the insatiable demand it is experiencing for its infant formula products in China. I believe this will continue to underpin strong earnings growth over the next decade and potentially lead to its shares providing investors with outsized returns. In addition to this, the company has a sizeable opportunity from its fresh milk expansion in the United States.

Altium Limited (ASX: ALU)

Altium is a printed circuit board (PCB) design software company which I believe has the potential to generate outsized returns for investors over the next decade. This is because the company’s award-winning PCB design platform is exposed to the rapidly growing Internet of Things market. Worldwide technology spending on IoT is expected to reach a massive US$1.2 trillion in 2022. And as the vast majority of IoT devices have PCBs inside them, Altium appears well-placed to profit.

CSL Limited (ASX: CSL) 

I think this biotherapeutics giant is arguably the ultimate buy and hold option on the Australian share market. A testament to this was the company’s full year results release this week. CSL posted revenue of US$8,539 million and net profit after tax of US$1,919 million, which was an 11% and 17% year on year increase, respectively, in constant currency terms. And in FY 2020 the company is expected to deliver further strong growth even though it will be taking a one-off hit from the transition to a new model of direct distribution in China. CSL expects net profit after tax growth of 7% to 10%. Due to the quality of its businesses and solid growth prospects, I believe it is capable of this level of growth long into the future.

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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 Altium and CSL Ltd. The Motley Fool Australia owns shares of A2 Milk. 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.

The Motley Fool's purpose is to help the world invest, better. Click here now for your free subscription to Take Stock, The Motley Fool's free investing newsletter. Packed with stock ideas and investing advice, it is essential reading for anyone looking to build and grow their wealth in the years ahead. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson. 2019