Warren Buffett, CEO of Berkshire Hathaway and arguably the greatest investor of all time, has time and time again stated that his favourite holding period for a company is "forever". That is, he waits patiently to find high-quality companies when they are trading at a reasonable price, and then holds onto them through the good times and the bad. He focuses on the belief that the business will be much bigger five, 10 or even 100 years down the track and ignores any temporary potholes the company may run into.
With the S&P/ASX 200 (INDEXASX: XJO) having skyrocketed to fresh highs in the months gone by, value investors have found it increasingly difficult to identify high quality stocks trading at reasonable prices. However, the market's sharp pullback of recent has created such an opportunity, meaning investors who have cash waiting on the sidelines can now pull the trigger.
Collection House Limited (ASX: CLH) is one such stock. To be perfectly clear, I would have been happy to have bought more shares in this company even when they were at their highest point, but they have since fallen by 10% making for an even more compelling buy. While the debt collection agency has a strong track record, having grown earnings over seven consecutive years including a 20% increase in NPAT in FY14, it's the future that is particularly exciting with this growth story seemingly just beginning.
Data analytics business Veda Group Ltd (ASX: VED) is another compelling prospect right now, particularly in light of the economic uncertainty sweeping across the globe recently. In such times, businesses tend to become far more focused on the strength of their balance sheets whereby they pay more attention to who they are lending to, and whether they will be able to repay. This was highlighted even through the GFC where Veda's revenues grew strongly. Veda Group enjoys a monopolistic position in the Aussie market in this regard, whereby it maintains credit records on 20 million individuals and 5.7 million businesses. At $2.33 a share, it appears to be an attractive buy today.
Also trading at an unbelievable price right now is Coca-Cola Amatil Ltd (ASX: CCL). While current shareholders won't be so impressed, opportunistic investors can use this opportunity to gain exposure to what Warren Buffett once described as a "forever brand". While the company is certainly facing its fair share of headwinds, I believe these will be limited to the near-term whereby long-term investors will be handsomely rewarded. At just $8.68, the stock hasn't traded this low since 2009, giving investors what could possibly be a once-in-a-lifetime opportunity to buy them so cheap.
The market's recent pullback has opened an incredible opportunity for investors to acquire shares in the three companies mentioned above. However, there is another stock which is posing as an even greater buy…
The Motley Fool's Top Stock for 2015
