In this article, we will discuss the Long-Term Stock Portfolio: 15 Best Stocks for 15 Years
Russell Investments believes that 3 features are defining the market outlook for 2025. These include the elevated level of the S&P 500 forward P/E ratio, the potential for further US dollar strength, as well as the direction of the US 10-year Treasury yield. The active equity managers have been challenged by the severe market concentration. The firm opines that a flattening out of such trends— which can be seen due to policy shifts or change in sentiments related to earnings growth and valuations for mega caps — can support active manager outperformance.
Russell Investments remains focused on sectors in which AI adoption has been ramping up, including industrials, healthcare, and consumer goods. As per the firm, companies that leverage AI for productivity improvements remain well-placed to gain a lasting competitive edge and provide healthy returns. Therefore, skilled active managers are required to look for such companies, primarily those that are in less-covered segments of the market.
READ ALSO: 7 Best Stocks to Buy For Long-Term and 8 Cheap Jim Cramer Stocks to Invest In.
Sectors Providing Investment Opportunities
With respect to real assets, Russell Investments sees attractive investment opportunities in real estate and infrastructure, mainly sectors that can benefit from the stabilization of long-term interest rates and favorable relative valuations in comparison to other growth assets. The application of AI in real estate, like data centers and healthcare facilities, continues to emerge as a critical growth area. Furthermore, the infrastructure investments continue to gain momentum from energy utilities and pipeline exposures, given the US administration’s emphasis on expanding LNG (liquified natural gas) production.
The firm also believes that an early focus on deregulation and tax cuts would likely be well-received by equity investors. Overall, an expected US soft landing, together with anticipated policy moderation on trade and immigration, creates specific opportunities for well-positioned portfolios, says Russell Investments.
With this in mind, let us now have a look at the Long-Term Stock Portfolio: 15 Best Stocks for 15 Years.
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Our Methodology
We sifted through the holdings of iShares Core S&P 500 ETF and shortlisted the companies that have 10-year revenue growth of over ~10%. Next, we selected stocks that were the most popular among elite hedge funds. We have ranked the stocks in ascending order of hedge fund sentiment.
Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 373.4% since May 2014, beating its benchmark by 218 percentage points (see more details here).
Long-Term Stock Portfolio: 15 Best Stocks for 15 Years
15. Linde plc (NASDAQ:LIN)
10-year Revenue Growth: ~10.4%
Number of Hedge Fund Holders: 70
Linde plc (NASDAQ:LIN) operates as an industrial gas company. Analyst Laurence Alexander from Jefferies maintained a “Buy” rating on the company’s stock with the price objective of $535.00. The analyst’s rating is backed by a combination of factors demonstrating a favourable outlook for Linde plc (NASDAQ:LIN)’s future performance. As per the analyst, the expected growth in sectors including electronics, food and beverage, and healthcare can fuel sales and EPS by 2025, despite worries in the cyclical markets such as metals and energy.
Furthermore, amidst uncertainties associated with trade policies and potential policy shifts, Linde plc (NASDAQ:LIN)’s emphasis on on-site volumes and productivity improvements can fuel its sales growth and protect margins, says Alexander. Elsewhere, analyst John Roberts CFA from Mizuho Securities maintained a “Buy” rating. This rating is backed by factors demonstrating the company’s stability and growth potential in a challenging economic environment. Linde plc (NASDAQ:LIN)’s performance in the industrial gases sector, which remains a reliable indicator of industrial cycles, is stable throughout both consumer and industrial-facing segments, says Roberts.
Mar Vista Investment Partners, LLC, an investment management company, released its Q3 2024 investor letter. Here is what the fund said:
“Linde plc (NASDAQ:LIN) is the world’s largest, global industrial gas producer. The company enjoys the highest profit margins and returns on capital in the industry. Linde’s primary products are atmospheric gases and process gases. Industrial gases have benefitted from secular growth trends in decarbonization and carbon sequestration. Moreover, the opportunity in blue and green ammonia and hydrogen are substantial. Projects in these areas are quickly being added to its backlog for future growth. We see these secular trends as long-term positives for Linde and the entire industrial gas industry.
Linde believes it can grow its volumes with new applications; the buildout of small, on-site plants using its technologies; and focusing on growing geographies such as India, Malaysia, Vietnam, China and Brazil. Despite the long-term growth opportunities, recent demand trends have slowed due to weak global industrial production and a challenging year-over-year comparable. Among the regions, the U.S. remains resilient, with volumes flat to slightly negative. Europe, Latin America, the Middle East, and China are all sending mixed to negative economic signals. We believe these slower trends are transitory in nature, providing an opportunity to purchase shares in Linde at attractive prices.”
14. T-Mobile US, Inc. (NASDAQ:TMUS)
10-Year Revenue Growth: ~10.6%
Number of Hedge Fund Holders: 70
T-Mobile US, Inc. (NASDAQ:TMUS) offers wireless communications services. Benchmark analysts maintained a “Buy” rating on the company’s stock with the price objective of $275.00, citing confidence in its growth prospects. The firm’s analysts noted the company’s healthy position among customers switching carriers, which can support T-Mobile US, Inc. (NASDAQ:TMUS)’s continued growth in postpaid phone and overall postpaid units. Furthermore, the company’s performance in core urban markets reinforces Benchmark’s confidence.
T-Mobile US, Inc. (NASDAQ:TMUS)’s early investments in 5G technology offered it a head start in network coverage and performance. This advantage was a critical driver of subscriber growth, mainly in the postpaid phone segment. Its sustainable 5G network advantage can continue to fuel market share and industry-leading EBITDA growth. As 5G adoption increases and more applications use this technology, the company remains well-placed to capitalize on this trend. T-Mobile US, Inc. (NASDAQ:TMUS) and EQT announced the successful close of their JV to acquire fiber-to-the-home provider, Lumos. This deal exhibits a critical milestone in T-Mobile US, Inc. (NASDAQ:TMUS)’s broadband growth and builds on the Un-carrier’s success in providing best-in-class connectivity.
Lumos operates a 7,500-mile fiber network, offering high-speed connectivity to 475,000 homes throughout the Mid-Atlantic. The JV combines the Un-carrier’s unique assets with EQT’s fiber infrastructure expertise and Lumos’ scalable build capabilities in a bid to fuel rapid network expansion, with a target of reaching 3.5 million homes by 2028 end. To drive this growth, T-Mobile US, Inc. (NASDAQ:TMUS) invested $950 million into JV, with an additional $500 million aimed between 2027 and 2028.
13. AbbVie Inc. (NYSE:ABBV)
10-year Revenue Growth: ~10.9%
Number of Hedge Fund Holders: 85
AbbVie Inc. (NYSE:ABBV) is a research-based biopharmaceutical company that is engaged in the research and development, manufacture, commercialization, and sale of medicines and therapies. Erste Group upped the company’s stock from “Hold” to “Buy.” The rating stems from the company’s strong sales growth forecast and promising pipeline of new products. Notably, AbbVie Inc. (NYSE:ABBV) has reaffirmed expectations for a high single-digit compound annual revenue growth rate through 2029 and has increased its 2027 combined sales outlook for Skyrizi and Rinvoq to over $31 billion.
AbbVie Inc. (NYSE:ABBV)’s strategic emphasis on expanding the product portfolio appears to contribute to its sustained growth and profitability over the long term. Elsewhere, Bernstein SocGen Group remains optimistic about the company, citing its entry into the obesity treatment market via the Gubra agreement. This move is regarded as a strategic diversification, aligning AbbVie Inc. (NYSE:ABBV)’s long history of successful ventures outside the core focus. AbbVie Inc. (NYSE:ABBV) believes that this partnership provides a strong opportunity based on the potential to address patient needs while, at the same time, bolstering long-term growth.
Ariel Investments, an investment management company, published its Q4 2024 investor letter. Here is what the fund said:
“We added research-based biopharmaceutical company, AbbVie Inc. (NYSE:ABBV) following a recent pullback in shares related to a Phase 2 clinical failure for schizophrenia drug, Emraclidine. Despite the setback, we believe AbbVie’s core inflammation and immunology (I&I) business is set to outperform. We expect next-generation I&I drugs, Skyrizi and Rinvoq, used in the treatment of inflammatory bowel disease, to be key long-term revenue drivers.”
