3 stocks I will ‘never’ sell

Warren Buffett’s favourite holding period is forever. Which three stocks does our writer never intend to sell? And which one is he buying now?

| More on:

The content of this article was relevant at the time of publishing. Circumstances change continuously and caution should therefore be exercised when relying upon any content contained within this article.

Sunrise over Earth

Image source: Getty Images

When investing, your capital is at risk. The value of your investments can go down as well as up and you may get back less than you put in.

Read More

The content of this article is provided for information purposes only and is not intended to be, nor does it constitute, any form of personal advice. Investments in a currency other than sterling are exposed to currency exchange risk. Currency exchange rates are constantly changing, which may affect the value of the investment in sterling terms. You could lose money in sterling even if the stock price rises in the currency of origin. Stocks listed on overseas exchanges may be subject to additional dealing and exchange rate charges, and may have other tax implications, and may not provide the same, or any, regulatory protection as in the UK.

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More.

There are a handful of stocks in my portfolio that I just can’t imagine myself selling because I don’t think there are better alternatives out there to replace them with. At least not in the industries they operate in. Here are three companies that I’m not intending to part ways with.

A great British exporter

The first stock I don’t plan to sell is British spirits giant Diageo (LSE: DGE). The company has a portfolio of over 200 brands sold in 180 countries.

Diageo’s most popular brands

DRINKSTATUS
Johnnie WalkerThe world’s best-selling Scotch whisky
TanquerayThe house choice for gin in 25% of the world’s best bars
SmirnoffThe world’s best-selling premium distilled vodka
GuinnessIconic stout
BaileysThe world’s best-selling cream liqueur
Don JulioThe world’s most popular tequila brand

Most of these brands have a timeless quality to them, though, of course, the risk of a recession is looming. While this could hurt sales of alcohol, consumers tend not to cut back on their favourite tipple even during recessions. And I think as disposable incomes rise in South-East Asia and Latin America, demand for Diageo’s products will remain strong for decades.

The DNA age

Illumina (NASDAQ: ILMN) makes gene sequencing machines that enable customers to read and understand an organism’s DNA. The firm’s products played a crucial role during the pandemic, enabling scientists to identify novel coronavirus mutations, track transmission, and ultimately to develop vaccines.

The company commands 70% of the global DNA sequencing market. A very healthy 70% of its revenues are recurring, and its operating margins are around 20%.

This dominance, however, hasn’t gone unnoticed by regulators, and Illumina has been thwarted recently in its attempts to acquire competitors. The risk here is that if organic growth slows, it won’t be able to grow through acquisition.

Even so, with only 0.02% of humans sequenced today, Illumina has a gigantic runway of growth ahead of it. I believe we’re entering the DNA age and I intend to hold my shares over the long haul.

An ageing population

By 2050, the world’s population of people aged 60 years and older will double to 2.1bn. This trend towards an ageing global population is one of the reasons I own shares in Intuitive Surgical (NASDAQ:ISRG).

The company is the top dog in global surgical robotics, controlling around 80% of the market. Its flagship product is the da Vinci Surgical System, which surgeons use to perform an increasingly wide range of minimally invasive procedures.

Some of the benefits of robotic-assisted surgery for patients include less pain and blood loss, reduced risk of infection, and less scarring. Also, recovery times are quicker, saving health systems a fortune.

Today, over 10m procedures have been carried out on the company’s robotic-assisted devices, from an installed base of 7,364 systems. Once medical professionals are trained on these products, they’re unlikely to switch to a competitor.

The competitive advantage Intuitive Surgical now has over its rivals is enormous, but that doesn’t mean competitors couldn’t emerge one day with even better surgical systems.

Still, an ageing global population should drive demand for robotic surgery for decades. So I can’t see myself ever selling the shares. In fact, I’m thinking about buying more.

Should you invest, the value of your investment may rise or fall and your capital is at risk. Before investing, your individual circumstances should be assessed. Consider taking independent financial advice.

Ben McPoland has positions in Diageo, Illumina, and Intuitive Surgical. The Motley Fool UK has recommended Diageo and Intuitive Surgical. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.

More on Investing Articles

A person holding onto a fan of twenty pound notes
Investing Articles

A high-yield dividend ETF and an investment trust to consider this November!

Investors wanting to boost their passive income could benefit from investigating these high-yield funds and trusts, says Royston Wild.

Read more »

Investing Articles

2 of my favourite, cheap FTSE 100 growth shares this November!

These FTSE 100 growth shares could be great long-term picks to consider, reckons Royston Wild. At current prices he thinks…

Read more »

Investing Articles

Up 26%, can the BT share price really push higher still?

The BT share price has surged on several catalysts in 2024, but there’s evidence to suggest that the stock could…

Read more »

Man writing 'now' having crossed out 'later', 'tomorrow' and 'next week'
Investing Articles

What are the best dividend shares to buy right now?

As shares in B&M European Value Retail have fallen, the dividend yield has reached a 10-year high. Should investors be…

Read more »

Surprised Black girl holding teddy bear toy on Christmas
Investing Articles

My favourite FTSE 100 passive income stock that keeps the Christmas coffers full

The holiday season is expensive and can leave many consumers struggling to make ends meet. Here’s how I use a…

Read more »

Investing Articles

The latest growth forecasts suggest the Glencore share price will hit 555p!

Harvey Jones has been disappointed by the performance of the Glencore share price since he bought the commodity stock last…

Read more »

Dividend Shares

A closer look at the 11% dividend yield forecast for Phoenix Group shares

Phoenix Group shares have one of the highest dividend yields in the FTSE 100 index today. Could this be a…

Read more »

Investing Articles

If I’d put £25,000 into the FTSE 350 at the start of 2024, here’s how much I’d have today!

Many FTSE shares have rebounded this year as interest rates look set to keep heading lower and market appetite for…

Read more »