The general investors see the equity market as roller coaster; up & down and up & down. As per them, some people whose luck favours, make money in this field and others don't. Normally long term investment in equities is safe but still some people lose their hard-earned money. The main two reasons behind this are choosing the wrong stock and trying to time the market.
Right stock and right time are the two important parameters while investing in long term equities. One stock which was good for investment 2 years back may not be suitable in today for long term investment. In this article I'll discuss about 3 stocks which are currently very good for long term investment. Anyone can expect good return in next 1-3 years from these stocks.
The first stock is Bunge Limited (NYSE:BG)
Bunge Ltd is a leading agribusiness and food company which has its operation across the globe. Its aim is to ensure a seamless connection between farmers and end users. Bunge processes, produces, moves, distributes and markets food in nearly 40 countries. Within last 9 months, it has taken two important decisions to expand its business. Those are:-
a)It has made a joint venture with Wilmar in Vietnam to leverage both companies' footprints in Asia. Bunge and Solazyme have expanded their joint venture for active research on some innovative food items.
b)These two joint ventures have strengthened the position of Bunge ltd in this industry for coming few years.
As per analysis, the expected average annual earnings growth of this company is 9.17% for next 5 years. The actual EPS was$ 4.83 for the fiscal year dec'2016 and the projected EPS for the current fiscal year is going to rise by 11%.
Currently the stock price is $61.57 (25.7.2016). As per its historical share price movement and financial forecasting, the share price of Bunge Ltd may raise upto 20% within 1 year from now.
Apogee Enterprises, Inc. (NASD: APOG)(LTP:$46.91)
The second stock for long term investment purpose is Apogee Enterprises, Inc. This is the leading company in technologies for the design and development of value-added glass products, services, and systems.
As per statistics, there will be good growth in U.S. commercial construction market in the fiscal year 2017. As Apogee holds most of the market share in architectural activity, it is expecting approximately 10% revenue growth and has increased its earnings guidance to $2.70-$2.85 per share from $2.65-$2.80 per share in fiscal 2017.
The company is also focusing on productivity improvement, cost control, new product launching, and expansion in both domestic and international market and finding out new opportunity in new architectural market.
As per analysis, the earnings of the company are going to increase by 27.48% over the last year earnings and in next 5 years, the earnings are expected to grow at an average annual rate of 10%.
As per its earnings estimate and historical share price movement analysis, the share of the company can be a good asset for long term investments. Within 1 year, the investor can expect atleast 15% capital appreciation on its share price.
Silicon Motion Technology Corp. (NASD: SIMO) (LTP: $51.64)
At this moment, my third choice for long term investment is Silicon Motion Technology Corp. It is the global leader and pioneer in developing NAND flash controller ICs for solid-state storage devices and specialty RF ICs for mobile devices. It holds most of the market share of US, Taiwan and China in this industry.
The company is expecting more than 20% annual revenue growth due to increasing market demand of its specialized products. Silicon Motion is well-equipped to adapt to industry changes by continuous production of innovative products. It is also engaged in acquiring new markets. During the third-quarter of 2015, the company completed the acquisition of China's leading enterprise grade PCIe SSD and storage array vendor, Shannon Systems.
In the last quarter(June'2016), Silicon Motion's revenues increased by 39.8% year over year to a record $112.7 million. As per analysis, the company is expecting its earnings will grow at an average annual rate of 20%. This year, the analysts are expecting its earnings will grow by 41.2% over the last year.
As per its future plans and historical share price movement, the share price of the company is expecting 23% capital appreciation on its share price within a year.
Disclosure: I/we have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.