The most common long-term investment vehicles are mutual funds and exchange-traded funds which together produce broad exposure to several asset classes. While this is certainly a sound strategy, it doesn’t mean that individual stocks can’t also be part of your retirement mix.
Investors that take the time to understand a company’s long-term growth narrative can become comfortable enough to buy the stock and let that story play out. Let’s look at a few strong buy-and-hold candidates for investors with 25-plus years until retirement.
What are Sprouts Farmers Market’s Growth Prospects?
The key to finding a good long-term holding is to identify a company that will benefit from secular shifts in consumer behavior. Health-minded grocery store operator Sprouts Farmers Market (NASDAQ: SFM) checks a lot of boxes.
The eating and shopping habits of the modern consumer are likely to have tremendous staying power. Especially coming out of a pandemic, people’s interest in healthy foods and being in tune with what they eat could last for decades. That makes Sprouts’ focus on health enthusiasts, which encompasses people from all generations, an attractive investment attribute.
The company competes in the $200 billion segments of the ‘at home’ food market that is likely to become a bigger part of the broader $1.2 trillion grocery market over time. Its market share is minimal but that’s a good thing because it means the runway for growth is very long. Over the next five years, Sprouts plans to double its footprint to over 400 stores by debuting in key markets like California, Texas, and Florida.
At the center of every Sprouts’ market is a vast assortment of fruits and vegetables. Likewise, Sprouts stock would be a great core holding for the long-term portfolio.
Is Square Still a Good Long-Term Investment?
The way things are going with mobile payments and cryptocurrencies, who knows what monetary transactions of the future will look like. Regardless, there’s a good chance Square (NYSE:SQ) will be playing a starring role.
The company has been a driving force in helping small businesses start and grow through their innovative commerce hardware and software tools. Mass adoption of its solution across many industries has led to a staggering 50% gross profit growth rate over the last five years. There’s good reason to believe it will continue to ring up strong profits as business around the world seek a single platform from which to operate their point of sale purchases, e-commerce, payroll, CRM, and much more.
Square is also branching out into the consumer side of commerce using the same playbook that has driven its huge success. The recently launched Cash App has all sorts of potential as the future of how individuals save, spend, and send money.
Despite the growth, Square has only scratched the surface of a massive long-term growth opportunity. It has less than a 3% market share in both the $100 billion sellers market and the $60 billion individuals market. As the business world continues to shift to efficient, technology-led financial solutions expect Square to be along for the long-term growth ride.
Is Activision Blizzard Stock a Buy?
The recent downturn in Activision Blizzard (NASDAQ: ATVI) stock tied to allegations of unfair hiring and promotion policies towards women is certainly warranted if the claims are valid. If so, it should eventually lead to equitable changes.
In the meantime, the stock’s retreat is presenting long-term investors with a golden opportunity to buy the gaming leader’s stock. The current accusations should be taken seriously, but eventually, things should get sorted out and the matter will amount to near-term reputational damage.
That means that the market’s focus will eventually revert to Activision’s leadership position a global gaming market that is forecast to generate over $175 billion in sales this year. By 2023 the market is expected to cross the $200 billion mark and be comprised of more than 3 billion gamers worldwide.
That’s great news for Activision who owns some of the top game franchises in the industry—and will likely continue to crank out hit after hit in the years to come. Building off the wild success of Call of Duty, World of Warcraft, and Candy Crush, the company is expected to derive growth from audience expansion and developing deeper engagement levels with its loyal player base.
With $9.5 billion of cash on hand the growth avenues are almost endless for Activision Blizzard in a world where video games are now competitive sports and a viable career path for today’s youth. Every growth investor with a long time horizon should have exposure to the gaming space—and Activision Blizzard is a great way to play it.