Successful investing involves much more than just identifying stocks likely to consistently grow profits over a long period of time.
Consider how two people could buy the same stock on the same day for the same price and yet one makes a painful loss and the other an incredible profit.
This is because during a 'crash' one investor panics and sells a good business at a loss, while the other holds the business, thinks long term and enjoys the capital gains as the company grows profits over the years to deliver big share price gains.
It's not rocket science, but it may be a rocky ride. Let's consider five stocks that impressed this earnings season, with an outlook to travel higher for those investors ready to ride out the market's swings and hold for the long term.
Magellan Financial Group Ltd (ASX: MFG) is a founder-driven international equities focused fund manger that just posted a strong year of growth. Funds are mainly denominated in Australian dollars, which means as the dollar falls the group's equity and profit-making potential rises.
The group has a strong track record of past investment performance, strong distribution networks in the high margin retail space and a decent track record of institutional business development. There's also a strong focus on costs due in part due to its relative youth as a business and selling for $18.85 it looks a long-term buy.
Corporate Travel Management Group Ltd (ASX: CTD) is another founder-driven business that just posted a strong year of growth. It's forecasting earnings growth in the region of 25%-30% in the year ahead, before the potential impact of any acquisitions. The group has a track record of delivery and the founder's long-term approach bodes well for market-thumping outperformance from today's price of $11.
Sirtex Medical Limited (ASX: SRX) is a healthcare business that just posted a strong year of sales growth for its radiotherapy treatment designed to prolong the lives of cancer sufferers. Oncologists around the world are increasingly accepting of the treatment's effectiveness and at $33.90 this looks a high-risk opportunity with potential to grow sales long into the future.
Blackmores Limited (ASX: BKL) is the vitamins business that may be beating rival Suisse in the battle for market share across Australia and the growth markets of Asia. With a powerful brand, some pricing power and huge Asian markets to grow into this business has potential. However, at today's price of $112 investors may be better off keeping it on the watchlist.
Vocus Communications Limited (ASX: VOC) is another founder-driven business expertly exploiting growth opportunities in the fibre-optic internet, cloud services and data-centre space. The business just posted another strong year of growth, is expanding its scale and looks to have potential to grow revenues and profits long into the future. In my opinion at today's price of $5.68 this is a growth stock to own.
