Hot money is always rushing from the next big thing to the next big thing, rarely still long enough to generate truly fantastic returns. Few investors could match the 781% return achieved by private hospital operator Ramsay Health Care Limited (ASX: RHC) over 10 years or the 820% return achieved by blood plasma product company CSL Limited (ASX: CSL) in the same time period. The smart money finds a great investment and stays there.
One company that could one day be a blue chip stock is Servcorp Limited (ASX: SRV), a company that rents out serviced offices all over the world. I think Servcorp is a great long-term investment because the phenomenal CEO Alf Moufarrige has given his sons plenty of time to learn the business, and there is a good chance they will keep steering the ship if he retires. The company is becoming quite popular now, so do not rush to buy shares at the current price of $4.90 because, quite frankly, there are not many sellers. Even now, the company yields 3.1%. If and when the Australian dollar does revert to mean against the US dollar, Servcorp shareholders will be laughing.
If you are ever going to buy Coca-Cola Amatil Ltd (ASX: CCL) shares, you might as well take advantage of the current negative market sentiment now. The company has failed to generate the anticipated growth from Indonesia and sales are under pressure in Australia because the company does not want to discount. Over the long term, that is probably the right strategy, and with the upcoming beer distribution business to begin contributing profits in the short term, this may be the best time to buy. Just one year ago, the stock was above $15. Sentiment can improve just as fast as it can collapse. I think Coca-Cola Amatil is a buy under $9.50.
It is very hard to go past Telstra Corporation Ltd (ASX: TLS) for long-term exposure to the telecommunications sector. The company is the dominant provider of mobile phone connections and owns the ducts that contain many other companies' fibre optic cables; and that's just one example of the company's long term competitive advantage. Telstra's plans to build a national Wi-Fi network will only boost the appeal of their mobile plans and that is just one example of the innovation the company is capable of.
