On Tuesdays we turn the spotlight outside of Porter & Co. to bring you exclusive access to the research, the thinking, and the investment ideas of the analysts Porter follows personally.
If you’re new to Porter & Co. and want to find out more about The Spotlight or want access to all past issues, click here.
Last week, we invited back one of our most popular guests, Pieter Slegers, who walked you through how he finds quality stocks to buy and hold forever.
Today, Pieter Slegers is back with a list of 10 quality stocks to own for the next 50 years.
If you’ve never heard Pieter’s name, you may know his viral X (Twitter) account – Compounding Quality – where his writing is followed by a “who’s who” of the rich and famous:
Jeff Bezos, Bill Ackman, LeBron James, Anthony Pompliano, Jared Kushner, and more than 600,000 others across social media… and in today’s Spotlight you’re about to find out why.
Enjoy,
Porter & Co.
P.S. If you want to find out more about Compounding Quality, and get his full portfolio and all his ongoing analysis and recommendations, then check out the special offer Pieter has put together for you.
10 Stocks For The Next 50 Years
By Compounding Quality
Have you ever heard about the Bonsai Portfolio?
A bonsai grows slowly. But it does so consistently every single year.
They can live for hundreds of years. A Bonsai Portfolio is a long-term investment strategy where you buy great companies that grow slowly but steadily. And that’s what we’re looking to build today.
10. ASML ($ASML)
Company Profile: ASML is one of the most important companies in the world.
They build the machines that make computer chips. These chips are the tiny brains inside your phone, laptop, and even your car.
Their machines are extremely precise and advanced. This is what makes ASML so special. The company helps chipmakers create faster, smaller, and more powerful chips, which we all rely on every day.
Why will the company still be relevant 50 years from now?
- High profitability with plenty of reinvestment opportunities
- ASML is dominating the entire market
- The world will need more and more chips in the years ahead
9. LVMH ($MC)
Company Profile: LVMH is a global producer and distributor of luxury goods.
The French company is a dominant force in the luxury industry, led by Bernard Arnault. They cover a wide range of consumer products and experiences.
LVMH operates more than 5,000 stores around the world. It’s the second largest company in Europe after Hermès.
Their handbags alone turned out to be a great investment. In 1979, a Louis Vuitton bag cost $150. By 2022, that same bag was worth $1,490.
Why will the company still be relevant 50 years from now?
- Luxury never goes out of style
- LVMH will benefit from the growing middle class in Asia
- Excellent business with a shareholder-oriented mindset
8. Investor AB ($INVE-B)
Company Profile: Investor AB is a Swedish holding company that has been around since 1916. They own major Swedish companies such as Atlas Copco, ABB, and AstraZeneca.
Why is this holding company so interesting? As an investor, you are always looking for companies with maximum returns and minimum risk.
Investor AB has both:
- Creating shareholder value: Investor AB grew its intrinsic value by 12.2% per year over the past 10 years
- Low risk: Healthy balance sheet and diversified portfolio
Why will the company still be relevant 50 years from now?
- Investor AB owns stable, high-quality companies
- A long track record of over a century
- The Wallenberg family still controls Investor AB
7. Kelly Partners Group ($KPG)
Company Profile: Kelly Partners Group is a serial acquirer in the accounting industry.
The Australian company serves private businesses and high-net-worth individuals with chartered accounting and advisory solutions.
Brett Kelly is the CEO and Founder of KPG. He is a complete Warren Buffett freak in the positive sense of the word. Currently, Kelly Partners Group is heavily expanding into the United States.
Why will the company still be relevant 50 years from now?
- Brett Kelly still owns almost 50% of the shares
- Plenty of reinvestment opportunities
- The accounting industry is very attractive for serial acquirers
6. MercadoLibre ($MELI)
Company Profile: MercadoLibre is an online shopping platform. The business model is similar to Amazon.
They started in Latin America and now serve many countries in that region. Customers shop for electronics, clothes, toys, and more. MercadoLibre also has a payment system called Mercado Pago, which makes it easy for people to pay online safely.
Why will the company still be relevant 50 years from now?
- Dominates the fast-growing e-commerce market in Latin America
- FinTech business is scaling rapidly with high margins
- Long-term estimated EPS growth: 16.5%
5. Alphabet ($GOOGL)
Company Profile: Alphabet, Google’s parent company, makes money from online advertising through its search engine, YouTube, and other platforms.
They also generate revenue from cloud computing services like Google Cloud.
Alphabet invests in innovative projects and businesses through its ventures arm, like self-driving cars and life sciences.
Why will the company still be relevant 50 years from now?
- Undisputed market leader in online advertising
- Insiders still have more than 50% of the voting power
- Cash flow machine with very high profitability
4. Visa ($V)
Company Profile: Visa is a global payments technology company. It provides electronic payment solutions through a network of branded credit and debit cards.
Just like Mastercard, Visa’s core function is to operate a payment network connecting merchants, banks, and cardholders.
When you make a purchase using Visa, the merchant pays a fee to Visa for processing the transaction.
Last year, 276 billion (!) payments and cash transactions were made via the company’s payment network. This means Visa executed 757 million transactions per day.
Why will the company still be relevant 50 years from now?
- Visa holds a strong market share in a fast-growing industry
- A very high profitability (Net Profit Margin: 52.9%)
- It’s almost impossible to compete with Visa and Mastercard
Now let’s dive into the top 3…
3. Berkshire Hathaway ($BRK)
Company Profile: Good investing is like watching paint dry and that’s exactly why Berkshire Hathaway is one of the top picks.
Berkshire Hathaway is the best investment conglomerate that has ever existed. A one-dollar investment in 1964 would be worth enough today to buy you a BMW.
Even after Warren Buffett, the company should still be able to slightly outperform the market.
Why will the company still be relevant 50 years from now?
- The best investment conglomerate that has ever existed
- One of the best company cultures in the world
- Relentless focus on creating shareholder value
2. Microsoft ($MSFT)
Company Profile: Everyone knows Microsoft, right? I’m even writing this article via Word. And I’m sure you’ve already heard of tools like Excel, Powerpoint, OneDrive, Teams, OneNote, …
The biggest growth driver for Microsoft is without doubt the cloud. Microsoft Azure is a cloud computing platform that offers services for computing, analytics, storage, networking, and AI.
Why will the company still be relevant 50 years from now?
- Microsoft Azure has plenty of growth opportunities
- Customers are very loyal
- The company is generating a lot of cash for shareholders
1. Amazon ($AMZN)
Company Profile: The most famous follower of Compounding Quality on X (Twitter)? Jeff Bezos.
Jeff Bezos founded Amazon in 1994 as an online bookstore. The company has evolved into the largest e-commerce company worldwide.
Today, Bezos still owns 12.3% of Amazon, making him the third richest man in the world.
Why will the company still be relevant 50 years from now?
- Amazon dominates the e-commerce space
- Their cloud segment AWS is growing at very attractive rates
- Prime memberships drive loyalty
That’s it for today.
Here’s an overview of all companies mentioned:
Editor’s Note: If you want to find out more about Compounding Quality – and which of these 10 are active recommendations in his portfolio, then check out the special offer Pieter has put together for Porter & Co.