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5 Best stocks to buy and hold For Long Run Investors

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One rule of thumb for stocks to buy in stock market is buy the right stocks and hold them for long term. In other words, take the advantage of compounding growth of stock in the long-time horizon. This is also secret success formula world best investor Warren Buffet.

Some stock will make money in the short term. Other stocks have potential to grow in the long run. What stocks to buy now among these 2 group of stocks, investors should go with the stock with long run growth potential.

Investors should also consider the to look at the stocks which meet following criteria.

  1. Stocks which has strong fundamental,
  2. Stocks which are market leader,
  3. stocks which are innovative,
  4. Stocks which have good management in place and
  5. stocks which have very strong brand recognition.

Here are the 5 stocks that has potential to grow in the long-time horizon with low risk potential and meets the above mentioned 5 criteria. These 5 best stocks to buy and hold now are:

  1. Gilead Science (GILD)
  2. Alibaba (BABA)
  3. Apple(AAPL)
  4. Alphabet /Google (GOOGL)
  5. Starbucks (SBUX)

 

Gilead Science (GILD):

Gilead Science (GILD) is our number one candidate to buy and hold for long term time frame in our 5 bests stocks to buy now. Gild is one largest biotech stock in US Stock market.

After 2 years lackluster performance, stock is showing sign to come back to growth pattern again.  Stock became 4-fold from 2012 to 2014.

Because of its big size (Market cap around $100 billion), this is expected that we would not see the same growth in the next 3 years. However, this is not impossible that stock will become double in the next 2 to 3 years. Stock has some attractive features that should be very stealth for long term investors:

  1. Low P/E ratio:
  2. Low P/S ratio
  3. Good dividend yield
  4. Recent acquisition of Kite pharma
  5. Possible and imminent break out of biotech sector and GILD will be one of the beneficiary of the sector breakout.

 

Gild weekly Chart
Gild weekly Chart

GILD is good stock to hold in portfolio for investor who wants to take advantage of biotech sector huge growth potential in near future.

Last 2 years, stock was in the pullback mode. Now stock broke its long-term downtrend in weekly chart.

Stock is already up 30% from its bottom in the last 3 months. Stock may hit $100 range by the end of 2017. That would be more than 55% growth in the  6 month.

This stock should be on the watch list radar for both investors and traders because of its huge potential upside move for both short and long run.

In the long run, stock may imitate its explosive 2012 to 2014 growth trend. This stock is just a good deal for value investors and growth investors.

2.Alibaba (BABA) :

Baba is the second stock in our stock selection list of stocks to buy now. Baba is also known as Chinse Amazon. Because of China’s large population and GDP growth rate, which is more than double of current USA population, BABA is expected to have better growth trajectory than USA AMAZON.

In 2017, BABA is up almost 100%. Very few large cap stocks has this type of growth this year. Based on market capitalization, baba may be only stock have this kind of growth this year.

However, it does not mean BABA has done its growth trajectory. Opposite is quite true.  BABA is still at the beginning phase of the growth trajectory.

With chinse GDP growth rate, stock veterans expect BABA is one of the company who will have trillion-dollar market cap.

Some features that make BABA an attractive long-term investment, are:

1 China total population

2.China GDP growth rate

3.BABA’s expansion to East Asia and Africa

4.BABA is building an ecosystem to help grow small business rather than destroy them

BABA Weekly Chart
BABA Weekly Chart

BABA is amazing growth story for 2017.Stock Gained almost 100% in first 9 month of 2017. After looking at chart parabolic growth, investors may think stock went up too much and it would not be wise decision to invest in stock.

This is true that stock look up too much. However, this is not still late to get into this trade, considering the massive growth potential stock has.

3.Apple (AAPL):

Apple stock is the third candidate in our stocks to buy and hold list. This is true that most of the long-term investors already have apple stock in their portfolio.

Still apple stock is hold because of its sticky consumer friendly product line even though we saw stock already done more than 7% in September 2017.

This is a big opportunity for new investors to include the Apple stock to their portfolio if they never had this attractive stock in their portfolio.

A $10000 investment in the Apple stock has become $100,000 in last 10 years. This explosive growth makes apple stock largest market cap stock of the world.

Funny thing is that this stock is not expensive rather cheap compare to the competition.

Stock still has some attractive features for long term investors:

  1. low P/E ratio
  2. Brand Loyalty
  3. cash flow
  4. cash at hand
  5. Strong balance sheet
  6. Exponential growth potential in service sector
  7. growth potential in wearable market- watch 3
AAPL weekly chart
AAPL weekly chart

Apple stock may be most popular household name is USA because of its impressive growth and branded products. Stock made 1600% growth from 2009 to September, 2017.

This stock is one of the candidate who will get boost of its stock price because of  expected new tax law.

This stock should be hold by any investors because of its brand name, reliability, last 10 years growth, expected huge growth potential in near future because of expected iPhone super cycle and tax law.

Apple service sector revenue is also growing exponentially last 2 years. Service sector revenue alone is equivalent to Fortune 100 company’s annual revenue.

This stock has true attributes of stocks to buy and hold  for both growth and dividend investors for next 5 years.

4.Starbucks (SBUX):

Starbucks is 4th candidate in our list. This seems to be surprising for many investors after seeing this name in the list. Many people will argue that Starbucks known for only selling coffee. This should not be in the list.

If this is the argument, we want to remind the investors the beverage company Coca-Cola (KO), who is selling the sweet water and considers one of the best brand name in  the business world and its consumers.

Investing in Starbucks is just like investing in Coco-Cola (KO) in its good old days. Some of the other features that should be attractive to the long-term investors are:

  1. Cash flow
  2. Balance sheet
  3. Expansion in other part of the world
SBUX weekly Chart
SBUX weekly Chart

Starbucks(SBUX) chart shows Stock did not make any good move in 2016 and 2017. However, if we look at overall chart, we see stock made an impressive move from 2011 to 2015. Investors’ money has become 5 times during this time.

After 2 years halt its growth, Stock may initiate its explosive move again. This stock is really good candidate who wants to add a stock that has both growth and dividend income potential.

5.Google/ Alphabet (Googl):

Google is the 5th candidate stock in our list of stocks to buy now. Google is also known as Alphabet. We use the term google because this ticker more popular and well-known to the reader.

Google is tech company and makes our life easy by providing easier and effective search result. Even though google is known for as search company, its tries to break into other sectors also. For example, driver less car technology.

Google is one of most advanced tech company in USA. Experts expects Google will be one of the major players in artificial Intelligence(AI).

Some attractive feature for google are:

  1. Dominant player in search engine business ( Kind of monopoly)
  2. possible major player in AI
  3. strong balance sheet
  4. Cash in hand
  5. innovative
Google Weekly chart
Google Weekly chart

Google is a good stock to hold for the investors who wants to hold one of the best reliable tech stock in their portfolio. Google weekly chart shows stock gain almost 400% from 2011 to 2017. Stock is also up more than 20% this year.

Final words, Stocks do not move up straight line rather move up in wave patterns. Investors should be patients if any stocks pull back and even fall into the correction territory.

These stocks have strong fundamentals and good stocks to buy now. It does not matter if the stock pull back, move sideways, Stocks will go up after certain period.

Just one point to remember that try not to overpay for the stock when you initiate a position. Buy the stocks at pullback.