August started off with a shake-up in the Tokyo Stock Exchange, leading to a 12% drop in the Japanese stock market on August 5th, causing widespread concern globally. However, as fears of a recession loomed and capital flows from Japan reversed, the stock market faced a challenging time.
But every cloud has a silver lining. The increased likelihood of aggressive interest rate cuts brought a sense of calmness, along with positive economic indicators from the US and stabilization in Japan, leading to a gradual recovery in stock markets.
As we approach the end of the month, many stock exchanges are expected to close August with index levels similar to where they started, following a V-shaped trajectory throughout the month.
Our stock list also experienced turbulence in August, with significant movements in both directions. Companies like Byggmax saw substantial gains, while Rugvista lost ground. Electrolux, which was struggling earlier in the month, managed to turn things around and end on a positive note.
Among the winners were Hufvudstaden and several foreign candidates like Exor and Allianz.
As many of our loyal readers are aware, August was not just a turbulent month for the stock market but also for Placera. Unfortunately, our parent company, Avanza, plans to shut down the editorial team this fall. Therefore, this will be our final stock list.
In light of this, we have taken a new approach and selected stocks for those with an ultra-long-term investment horizon. Our goal remains to provide inspiration and suggestions for stocks that could potentially be part of an individual portfolio, offering stability and long-term returns.
In short – Evergreen Stocks.
Stock Picks for Long-Term Investing
Ellinor Beckett
ABB: A global market leader benefiting from long-term trends in automation, electrification, and energy efficiency. ABB has shown improved profitability recently, focusing its operations through strategic divestments.
Assa Abloy: Another global leader, focusing on digitalization and security. With a track record of successful acquisitions and innovative products, Assa Abloy is positioned for long-term growth.
Xylem: Addressing the critical need for water infrastructure globally, Xylem offers advanced technology solutions and recurring revenue streams.
Martin Blomgren
Atlas Copco: A stalwart in the industry known for its high return on capital, decentralized culture, and innovative product offerings. A solid choice for a long-term portfolio.
Volvo: Undervalued due to past economic downturns, Volvo has strengthened its position with a robust balance sheet and strategic investments in new technologies.
Pekka Kääntä
AstraZeneca: With a diverse product portfolio catering to an aging population and a strong pipeline of innovative treatments, AstraZeneca is poised for long-term success.
Volkswagen: A stalwart in the transportation industry, Volkswagen’s resilience and stability make it an attractive long-term investment.
Tesla (sell): Despite its popularity, Tesla is considered overvalued, relying heavily on the performance of its CEO Elon Musk.
Karl Lans
Münchener Rück: The world’s largest reinsurance company with a solid track record and strong financials, making it a reliable choice for long-term investors.
AXA: A French financial and insurance conglomerate with promising prospects for long-term growth and stability.
By diversifying your portfolio with these evergreen stocks, you can position yourself for long-term success and weather economic uncertainties. Remember, investing is a marathon, not a sprint, and having a mix of stable and growth-oriented stocks can help you achieve your financial goals over time.
Demand for life and health insurance is expected to grow steadily in the coming years. AXA has around 90 percent recurring revenue. Overall, higher recurring dividends, higher profit growth, and a focus on organic growth speak well for the company. AXA is a typical value stock and belongs in a classic dividend portfolio.
German Nemetschek’s software streamlines the construction and engineering industry, reducing costs and emissions. Nemetschek’s software allows construction companies to work more industrially and improve the flow of construction processes. Despite the weak construction market, the company has managed to remain stable. Digitalization in the construction industry is still low, while there is a high pent-up demand for infrastructure investments and green building and infrastructure transition. Nemetschek’s advantage also lies in being family-owned.
Constellation Software spin-off Topicus, headquartered in the Netherlands, acquires European VMS companies (Vertical Market Software). The company has a very good return on capital, and the European VMS market is highly fragmented (providing ample opportunities to reinvest cash flow). Hopefully, Topicus can embark on a similar journey as Constellation Software, but in Europe.
Technology trader Oem International has historically been a fantastic investment for investors, and we at Placera believe that the future looks bright. Long-term main owners, robust finances, and a long way to reinvest cash flows make the stock interesting for long-term investors.
The Lifco group, where Carl Bennet is a major shareholder, has a truly fine financial history. Lifco has successfully decentralized its organization in a phenomenal way and is one of the best companies in its sector. Even though the stock is richly valued, this is a candidate for the eternal portfolio.
Lundbergföretagen has already proven itself to be long-term. An easy exercise in theory, which proves to be significantly harder to practice. The stock trades just below the net asset value, but with portfolio companies with high earnings in forestry, banking, real estate, and industry, conditions are created to slowly but surely increase the net asset value, much like the company’s first 80 years.
Essity is now fully focused on organic growth and increased profitability. After the sale of Vinda, both indebtedness and dependence on pulp prices are significantly lower. With Vinda out of the picture, overall profitability is also higher. Based on simple calculations of goal achievement, the stock is undervalued. If the goals are met, Essity deserves higher valuation multiples than today. Higher valuation multiples on higher profits have a good effect on stock prices. Human dependence on the company’s products is eternal, growth is structural as more and more people enter the global middle class, and the risk in the investment is low.
Blackrock is the world’s largest asset manager with over $10 trillion in managed capital. The company’s strong market position and broad product portfolio make them a stable player with long-term growth potential. With an extensive range of investment products, including Ishares ETFs, and a strong global presence, Blackrock offers a diversified revenue stream that reduces risk and increases stability. Additionally, Blackrock continuously invests in technology and data-driven solutions like the Aladdin platform, strengthening their competitive advantages and positioning them well for the future of asset management.
Wolters Kluwer has a stable revenue model through its necessary and often subscription-based solutions in law, health, tax, and finance, providing the company with a stable and recurring revenue stream. They have successfully transitioned to digital solutions, which not only improves customer experience but also creates long-term competitive advantages through innovative platforms and services. With a strong global presence, market dominance, and deep expertise in regulated industries, Wolters Kluwer is well-positioned to benefit from the increasing demand for compliance and decision support solutions.
Hermès is synonymous with traditional luxury and quality, and the company’s strong brand and highly loyal customer base contribute to stable growth over time. Their strategy of controlled expansion and limited distribution creates high demand and maintains the exclusivity of their products, resulting in long-term value growth. Title: Unveiling the Top Investment Strategies for Maximizing Returns in Today’s Financial Markets
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