It's all too easy for investors to become overly concerned with short-term fluctuations in share prices. Indeed, what matters most is the long-term performance of stocks and, as history has shown, holding on to shares for many years tends to be a more successful strategy than constantly buying and selling.
With that in mind, here are three companies that could prove to be great long-term performers. While their share prices will undoubtedly fluctuate over the short term, they're high-quality, good value and offer sufficient long-term potential that you could hold them through your retirement.
Wesfarmers Ltd
Although having interest rates of just 2.5% is clearly bad news for savers, it's great news for consumers. Evidence of this can be seen in the forecasts for Wesfarmers Ltd's (ASX: WES) bottom line over the next two years, with it being expected to increase at an annualised rate of 12.8% during the period.
This strong growth rate could continue over the medium to long term and may even be boosted if the RBA follows its US and European counterparts and slashes rates further.
Despite having such impressive forecasts, Wesfarmers still offers tremendous value for money, with it having a PEG ratio of just 1.6. As a result, now could be an opportune moment to buy the stock for the long term.
Fortescue Metals Group Limited
As mentioned, short-term price fluctuations can equate to buying opportunities for long-term investors. Nowhere is that more true than the mining sector, which has been ravaged by declining commodity prices throughout 2014. As a result, a number of mining companies are now trading at super-low valuations.
An example of this is Fortescue Metals Group Limited (ASX: FMG), which has a P/E ratio of just 9.4. Its earnings are falling rapidly as a lower iron ore price hits margins but, for long-term investors, this could present an opportunity.
Certainly, the iron ore price may take time to recover, but with shares in Fortescue being so cheap and offering a fully franked yield of 4.7%, they could prove to be a top notch investment.
Transurban Group
At first glance, Transurban Group (ASX: TCL) looks like a hugely overvalued business that is more akin to a utility than a growth play. After all, can toll roads really deliver above average growth prospects in the long run?
The answer to that question is a clear 'yes'! Transurban is expected to increase its bottom line at an annualised rate of 26.7% over the next two years, which is a staggering rate of growth and means that shares in the company trade on a PEG ratio of just 1.5.
This offer of growth at a reasonable price is allied to a partially franked yield of 4.6% that could grow to as much as 5.3% within two years.
