Placing a stock “in the bottom drawer” doesn’t mean forgetting about it – there is too much about holding shares in companies that requires constant monitoring for that to be a valid investment strategy. An investor must always be ready to make big decisions on any stock. But stocks that will reward a long-term view is another thing – maybe the better term would be “cellaring” stocks, with its connotations of monitoring and turning the bottle every now and then. Here are 3 candidates that should reward an investor laying them down for a while.
1. CSL (CSL, $234.40)
Market capitalisation: $106.3 billion
One-year total return: 17.4%
FY20 estimated dividend yield: 1.3%, unfranked
Analysts’ consensus target price: $250.03 (Thomson Reuters), $241.99 (FN Arena)
Australia’s biotech giant is a candidate for the bottom drawer mainly because of the strength and quality of its CSL Behring and Seqirus businesses: CSL Behring is the world’s largest maker of plasma-based therapies, derived from immunoglobulin (IG), a component of blood plasma, while Seqirus is the second-largest company in the influenza vaccines industry. CSL’s history, size and scale give it a competitive advantage over most of its competitors, and the company’s entry into the China plasma market in 2017 – it was the first foreign company to gain full access to the Chinese market – positioned it well in the second largest market in the world, with immunoglobulin sales expected to grow at around 15% a year.