The average investor struggles with the concept of averaging-up or buying more shares in a company after a strong run in the share price. Many investors would prefer to wait for a dip rather than buy into a strong run in the share price which could feasibly end at any moment.
Missed Opportunity
The problem with this mentality is that the biggest and best companies have experienced exceptional runs in their share prices with few decent dips for cautious investors to buy into. One of the best examples of this is Commonwealth Bank of Australia (ASX: CBA), which experienced an almost uninterrupted rise from $5.80 in 1992 to $35 in 2002. Investors that waited for a dip would have missed out on most, if not all, of that rise.
New 12-Month Highs
Keeping with the theme of high-quality companies hitting new highs; here are four that appeal as long-term growth options for conservative investors.
Blood plasma product supplier CSL Limited (ASX: CSL) recently hit an all-time high of $80.44 after reaching a low of $4 as recently as 2002. Buying into the dips in the share price of CSL, which fell to $63 in September, has been extremely profitable as the company continues to dominate the global blood plasma product market. Competition is increasing but new products are expected to help grow revenue and profit over the medium term.
Shares in Amcor Limited (ASX: AMC) have surged nearly 20% in two months and recently hit an all-time high of $11.92. Amcor is the world's largest packaging company, serving almost every industry with operations on most continents. Amcor's strength is its ability to produce high quality products at lower prices than competitors. The global packaging market continues to expand and is expected to do so for many years yet.
Cochlear Limited (ASX: COH) shares have been a little hit and miss over the last couple of years. The shares have fluctuated between $40 and $85 over the last eight years, but recently hit a new 12-month high of $73.50 as investors become more convinced that management can turn around a sluggish sales trend.
Westfield Corp Ltd (ASX: WFD) only listed recently following the reorganisation of Westfield assets but is now the largest ASX-listed holding company of overseas real estate assets. The group's stable of high-quality shopping centres and pipeline of development work means that it will be an investor favourite for many years. It also boasts a respectable dividend yield for income investors!
Follow the Trend
A trend is evident in the companies above. They all hold market-leading positions and have learnt how to deal with competition over many years.
