One of the key parts of a successful wealth-building strategy is finding the best long-term stocks and holding them for years.
Solid long-term stocks let you collect gains steadily for five, 10, or 20 years while you focus on finding other investments and opportunities. You can check in with them every quarter and see if anything has changed or adjust your holdings if your investment priorities are different. But for the most part, they are low maintenance, low risk, and high reward.
Take Wal-Mart Stores Inc. (NYSE: WMT) stock for example. The company was already the toast of the retail world in 2005, but it has still been a profit machine over the past 10 years. Investors who bought WMT shares 10 years ago and held them through today have seen a 61% gain. That doesn't count what they've earned from Wal-Mart's dividend - currently yielding 2.4%.
Now, we've picked three of the best long-term stocks on the market today. Each of these three stocks are leaders in their respective industries. They also have solid balance sheets and growth projections.
One just saw its revenue jump 40% in the most recent quarter. Another has annual revenue of $226 billion with gross profit margins near 40%. The third expects its industry to fill $5.2 trillion worth of orders in the next two decades.
But those aren't the only reasons we're recommending them. Here's why these three stocks will be profit machines for years to come...
Best Long-Term Stocks to Buy No. 1: Alibaba Group Holding Ltd. (NYSE: BABA)
"Most investors are right now looking at the steep skid in Alibaba as a major cause for concern. But I only see opportunity," Money Morning Executive Editor Bill Patalon told his Private Briefing investment service readers. "I see an opportunity for you to create the kind of wealth that you'll be able to pass along to future generations."
In its last earnings report, Alibaba reported revenue of $4.2 billion. That was a yearly increase of 40%. But Wall Street panicked because it missed analyst expectations of $4.45 billion. The stock dipped 11%.
Alibaba has also faced concerns about counterfeit merchandise on its sites, and regulatory issues in Taiwan. But these are not backbreaking issues.
You see, the company's growth numbers are rock-solid. Earnings increased 80% last quarter. Gross merchandise volume (GMV) was up 49%. Total mobile users were up 95%.
The company's mobile base is growing too. It hit 265 million monthly active users last quarter. That's a yearly increase of 95%, and a quarterly increase of 22%.
GMV from mobile users hit $327 million. That's up 213% from 2013 and 64% from Q2. Now mobile users account for 42% of Alibaba's total GMV. It was only 35.8% in last quarter's report.
Alibaba's shift to mobile e-commerce is extremely important. Right now, the global mobile market is growing at a staggering rate.
According to the research firm Gartner, mobile payment transactions will grow by 35% annually through 2017. The global market for mobile payments will reach $721 billion by the end of 2017.
Alibaba stock is such a good long-term buy, especially at this price, that Patalon suggests adding to your position every time the stock comes down.
"Alibaba is a stock that you have to be willing to hold for a long time," Patalon said. "You don't just load up the truck with Alibaba stock and pray. You buy in and add to your position when there are pullbacks. This is a stock you want to hold for 10 to 15 years."