True long-term investors don't panic about market crashes.
Unless their investment thesis has changed, falls in the value of a share only represent opportunity to those with the right time frame in mind.
If you pick the right company to invest in, short-term blips are largely immaterial to the company's growth.
Take for instance, BHP Billiton Limited (ASX: BHP).
Despite falling to within 5% of its lowest price in five years, BHP has still returned 143% over the past ten years.
The other companies in today's article unfortunately haven't performed quite so well.
Coca-Coca Amatil Ltd (ASX: CCL) – last traded at $8.77, down 28% for the year
Coca-Cola's decline has been well covered, with many writers (including myself) feeling that the share is a definite buy at today's prices.
However with stiff headwinds from competition, pricing pressure, and an unfortunate 10-year price return of 19.7%, many other investors feel that Coca-Cola's best days are behind it.
It's telling that analyst Morningstar has a 'fair value' target of $8.50 on the stock, and believes the company is no longer the defensive business it once was.
I personally think that Coca-Cola is at a critical turning point that will decide whether it reinvents itself or lapses into mediocrity for the next decade.
While Coca-Cola is presently out of favour, I am confident that the company behind the phenomenally successful Share a Coke campaign has what it takes to turn the business around.
Although with that said, investors should not be surprised to see the company head lower in the short term as poor results, restructuring costs and falls in the wider ASX take effect.
Primary Health Care Ltd (ASX: PRY) – last traded at $4.27, down 11.4% for the year
Primary Health Care is another company to disappoint the market over the past ten years, having lost 13% of its share price over that time.
However with the company at its lowest point in two years, the time could be ripe for new buyers given that Primary enjoys good medium to long-term tailwinds and continues to acquire new business lines, recording profit growth of 8% in FY14.
The company also conservatively predicts earnings growth of between 5%-12% for this year which is likely to lead to greater dividends and price growth for shareholders.
Given its defensive nature and good future prospects, I believe Primary has fallen roughly as far as it is likely to go, although a slipping ASX may drag it down further.
BHP Billiton Limited (ASX: BHP) – last traded at $33.65, down 5% for the year
Somewhere in the back of my mind, there lurks an ever present, automatic $30 'Buy' order on BHP.
Regardless of what's happening with the company or the market, if BHP closes in on that level I start to get greedy.
While I unfortunately missed out by a whisker back in 2012 and 2013 when the company stopped short at around $31, the latest uncertainty with China and global resource markets may – I hope – push BHP all the way to $30.
However the realist in me doubts it will fall so far, with considerable seller resistance the closer we get to that magic number.
It doesn't help that Morningstar has a 'fair value' of $44 on the share either.
Nevertheless while BHP may fall further, I doubt it will go as low as $30, and it also looks to be pretty good value at current prices.
