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3 ASX shares to buy for the next decade – Motley Fool Australia

These 3 ASX shares have strong long-term growth potential. But you need to be patient with them to realise the strong potential performance.



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I think some ASX shares would make great candidates to buy and hold for the next decade.
Over the long-term it’s beneficial for your wealth if you can avoid over-trading your share portfolio. Each transaction you make incurs brokerage and each crystallised gain triggers a capital gains tax event. You want to avoid these types of costs where possible.
But you don’t want to be left holding a dud ASX share for years either. I think it’s important to invest in great shares to start off with and just enjoy the ride.
That’s why I think these three ASX shares would be great ideas to buy and own them for the next decade:
Share 1: Bubs Australia Ltd (ASX: BUB)
At the moment Bubs is my favourite small cap ASX share idea. The company is displaying all of the right attributes to generate strong returns over the next decade.
For a long-term idea I like to see a large potential total addressable market that the company is only just beginning to tap. The infant formula ASX share is growing in China, Vietnam and I’m sure it has it’s aiming for other Asian countries with consumers that want high-quality products. In 10 years we may see Bubs sold in places like North America or even Europe.
I also want to see that the company is growing its profit margin. Economies of scale is another factor for delivering strong profit growth. In the FY20 half-year result the company saw its gross margin increase from 19% to 24%. In June 2018 the gross margin was just 14%.
The other factor I like to see is effective leadership. Bubs has done a really good job of expanding its domestic and international distribution channels as well as securing its supply chain, particularly with the Deloraine manufacturing facility acquisition.
I’d like to buy shares at the current Bubs share price.
Share 2: Altium Limited (ASX: ALU)
Altium has been one of my preferred long-term ASX share ideas for quite a while.
The ongoing COVID-19 pandemic is definitely going to cause a hit to margins and profit in FY20. The upcoming US election may also cause a lot of volatility, particularly if Joe Biden wins and reverses the recent US corporate tax cut.
But the ASX ideas in this article are for a 10-year investment, not 10 months.
I believe Altium is one of the brightest prospects on the ASX. The electronic PCB software business is still aiming for global market leadership by 2025. I think it was a smart move to try to keep growing market share over the last few months, rather than trying to protect short-term profit margins.
The world is getting increasingly technological and Altium is an important part of that. Some of its clients include Google, Apple, Tesla, Space X, Amazon, Disney and so on. These are high-quality clients to have.
Altium’s balance sheet is in a strong position with no debt. It hasn’t needed to do a capital raising like a lot of other mid-caps on the ASX over the past six months.
I think the ASX share has quality and focused management that can turn the business into a global leader by 2030, if not much earlier.
At the current Altium share price it’s trading at 49x FY22’s estimated earnings.
Share 3: Magellan Global Trust (ASX: MGG)
Magellan Global Trust is one of the best listed investment trusts (LITs) out there in my opinion. It’s operated by the high-performing Magellan Financial Group Ltd (ASX: MFG), with rich lister Hamish Douglass at the helm.
The ASX share aims to invest in the highest-quality global shares that it can find. At the moment those names include picks like Alibaba, Alphabet, Atmos Energy, Microsoft, Tencent, Facebook, Visa, Mastercard, Reckitt Benckiser and Novartis.
It regularly outperforms its global benchmark after fees and targets a distribution of 4% of its net asset value (NAV).
At the current Magellan Global Trust share price it’s possible to buy this LIT at a small discount to its NAV, which is attractive in my opinion.
Over the next decade I think this ASX share could generate solid net returns.
Foolish takeaway
I think all three of these ASX shares are quality ideas which can outperform the ASX over the next decade. However, I’m a bit nervous of what may happen in the US due to COVID-19 impacts and the upcoming election, so whilst I’d be happy to buy Altium and Magellan Global Trust shares today, an even better price could come up later this year. I’d pick Bubs first at today’s share price.
Where to invest $1,000 right now
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*Returns as of June 30th

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