Certain stocks have consistently showcased their quality again and again over the years, marking them as perfect candidates to sit in a portfolio for life.
With the stock market hitting all-time highs, stock picking has become less complex. It’s when markets turn that committing to stocks becomes a lot trickier. Here are three stocks that we think could weather most short-term volatility and be kept for life.
1. Amazon
With humble beginnings as an online book store, Amazon (NASDAQ: AMZN) has become a multinational behemoth. Its offerings include e-commerce, cloud computing, AI, and much more.
Much of the success is down to the CEO and founder Jeff Bezos, who has continually shaped and molded Amazon into what it is today. It holds roughly 38% of the e-commerce market in the United States and its Amazon Web Services department dominates the cloud computing sector.
Unlike a lot of other big companies, Amazon has been growing significantly every year. It was the second U.S. company ever to hit a market cap of $1 trillion in September 2018. Over the past decade, Amazon stock has a CAGR of 30%, which is outstanding for a company of its size.
There is room for growth in 2020 as Amazon’s delivery capabilities have dramatically improved through large investments in one-day delivery systems. Analysts estimate that Amazon’s stock could hit $2,330 at some stage during the year, which would represent a 25% increase on its current price of $1,865.
2. Berkshire Hathaway
Berkshire Hathaway Inc. (NYSE: BRK. B) is a global conglomerate under the control of legendary investor Warren Buffett. Some of the brands under its umbrella include Duracell, GEICO and Dairy Queen, as well as having significant positions in the likes of Kraft Heinz Co (NASDAQ: KC), Coca-Cola Co (NYSE: KO), Wells Fargo & Co (NYSE: WFC), American Express Company (NYSE: AXP), Apple (NASDAQ: AAPL) and Bank of America Corp (NYSE: BAC).
Berkshire’s long term plan focuses on businesses with products or services that will still be in demand in 50 years.
Berkshire Hathaway has consistently outperformed the market since 1965. Over the past decade, the CAGR has been. Its stock price has grown at a compounded annual growth rate of 11.3% over the past ten years.
Buffett is currently holding a record $128 billion cash pile, which suggests he is preparing for a market setback. Lack of spending in recent years may spell slow growth in the coming years, but the company can then afford expansion during a time of market decline.
3. Disney
Walt Disney Co (NYSE: DIS) is a name synonymous with mass media and entertainment, having acquired some massive names such as Marvel and Lucasfilm, as well as a major TV presence through the ABC broadcast network. Disney’s film segment made over $12 billion in 2019 and holds seven of the top ten grossing movies of all time, making it a formidable portfolio.
As well as film, Disney’s park segment saw a 6% increase in 2019 to revenues of $26.2 billion, with investments in expansion already in place. The main competitive advantage that Disney has is its ability to capitalize on its unique product offering across many different spheres. Disney has developed brand loyalty through its unique and creative ideas, allowing for expansion across different mediums.
Disney’s rapidly growing Disney+ streaming service already boasts more than 20 million subscribers since its November release, with plans to hit up to 90 million by 2024. It currently looks to be the biggest threat to Netflix’s (NASDAQ: NFLX) dominance.
It certainly is a stock to consider going forward due to its strong base of IP, continuing creativity, its diversification, and numerous revenue streams.
As a whole, Disney definitely looks like an attractive buy at the right price as its upside in the coming years is seemingly limitless. It is very diversified, with countless revenue drivers constantly growing from year to year.
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MyWallSt operates a full disclosure policy. MyWallSt staff currently holds long positions in Amazon, Berkshire Hathaway, and Disney. Read our full disclosure policy here.