Monday, July 13, 2020

Why I would buy and hold CSL and this quality ASX 200 share

planning growing out of piles of coins, long term growth, buy and hold

I continue to believe that one of the best ways to create wealth is to buy quality shares and hold them for the long term.

This is an investment strategy used by many of the world’s richest people, including legendary investor Warren Buffett. And given Mr Buffett’s track record and net wealth, it’s hard to argue against it.

But which ASX 200 shares should you buy and hold? I think the two ASX 200 shares listed below would be quality buy and hold options right now:

A2 Milk Company Ltd (ASX: A2M)

The first ASX 200 share to consider buying and holding is A2 Milk Company. It is an infant formula and fresh milk company which has delivered explosive earnings growth over the last five years. This has been driven largely by the growing appetite for its infant formula products in China.

The good news is that the company still has a long runway for growth in this key market. This alone could underpin strong earnings growth over the coming years, but looks likely to be bolstered by its expanding fresh milk footprint, acquisitions, and new product launches.

CSL Limited (ASX: CSL)

I think this biotherapeutics company would be a great buy and hold option. While there are concerns that the pandemic could reduce its plasma collections and have an impact on future immunoglobulin and albumin production, I expect this to be offset by higher demand for flu vaccines. Furthermore, given the high levels of unemployment because of the pandemic, I suspect that plasma collections will be easier to come by once the crisis passes.

Looking to the future, I believe its current portfolio of therapies has the potential to drive solid earnings growth over the coming years. This should be boosted by CSL’s pipeline of lucrative therapies which have the potential to generate billions of dollars of sales over the next decade.

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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 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 post Why I would buy and hold CSL and this quality ASX 200 share appeared first on Motley Fool Australia.

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