Search by ticker code:
Generic filters

2 ASX shares I’d buy and hold for the next decade

A lot of people profess to be long-term investors in ASX shares.

The strategy is best summarised by British fund manager Terry Smith’s three investing principles:

  1. Invest in good companies
  2. Try not to overpay
  3. Do nothing

However, in reality, few investors are truly long-term. For example, the average fund manager holds a company for around seven and a half months based on the BofA Global Fund Manager Survey.

The benefit of thinking and investing long-term is that it enables you to see the forest from the trees.

Will this business be materially bigger in ten years? 

Here’s an introduction to two ASX shares I would buy and hold for the next decade.

1. NextDC (ASX: NXT)

NextDC Ltd is a relatively simple business model. The company designs, builds and manages data centres.

So what makes data centres so interesting?

It’s essentially the digital version of real estate.

Just like products – every tweet, post, story, article, video, photo and document on the internet needs to be stored somewhere.

Moreover, the amount of data being created is rising at an exponential rate. In 2018, there were 33 zettabytes (ZB) of global data. In 2020, this grew to 59ZB and is predicted to reach 175ZB by 2025.

NextDC is leveraged to this megatrend.

However, what makes NextDC unique is that it’s the only tier four network in Australia. Data centres are rated for uptime, availability and security across four tiers. One is the lowest, four is the highest.

As a result, the business targets premium customers with the highest data requirements enabling high returns on capital.

With the amount of data only increasing, I think the future is bright for NextDC.

2. Uniti Group Ltd (ASX: UGL)

I would make the argument that Uniti Group has the best business model of any ASX share.

W&I Business Model Source: Uniti Group “Investor Presentation – Acquisition and Equity Raise”
Uniti business model. Source: Uniti Group “Investor Presentation – Acquisition and Equity Raise”

The business develops and owns fibre networks.

Let’s say you’re a property developer building a 50-story building. You need to contract water, electricity and gas connections. Internet is no different.

The developer has two contractors to choose from. The large government owned-NBN, which is slower and more expensive. Or Uniti, the smaller, faster, cheaper private option.

I know which I’d choose. But here’s the kicker.

After Uniti installs the fibre, in most cases it will own the fibre infrastructure. Then it gets to charge retail service providers (RSPs) such as Telstra Corporation Ltd (ASX: TLS) and Optus to connect to each apartment for the life of the fibre asset (usually 20-25 years).

Effectively, Uniti is paid to build the fibre. Then it receives connection fees from RSPs. Little cash outflow for long-duration and high cash flow from monopoly assets.

With roughly 20% order book growth locked in for the next five years, I think Uniti will be far bigger by 2031.

Final thoughts

To leave you with a common investing adage:

“…in the short run, the market is like a voting machine – tallying up which firms are popular and unpopular. But in the long run, the market is like a weighing machine -assessing the substance of a company” – Benjamin Graham

Rather than look for what’s popular, analyse the business fundamentals and what will drive value in the long-term.

FREE & NEW: Our Complete Passive Income Strategy

With interest rates UP, now is one of the best times to start earning passive income from a portfolio. Imagine earning 4%, 5% -- or more -- in dividend passive income from the best shares, LICs, or ETFs... it's like free money credited to your bank account.

So how do the best investors do it?

Whether you have $2,000 or $2,000,000, our Chief Investment Analyst Owen Rask has just released his brand new ASX Passive Income Report. Featuring the best dividend ETFs, LICs, funds and shares, this report cannot be missed by anyone wanting passive income in 2022 and 2023.

You can INSTANTLY access Owen's report -- or get it emailed to you -- for FREE by CLICKING HERE NOW or the button below.

Unsubscribe anytime. Read our TermsFinancial Services GuidePrivacy Policy. We’ll never sell your email address. Our company is Australian owned.

Information warning: The information on this website is published by The Rask Group Pty Ltd (ABN: 36 622 810 995) is limited to factual information or (at most) general financial advice only. That means, the information and advice does not take into account your objectives, financial situation or needs. It is not specific to you, your needs, goals or objectives. Because of that, you should consider if the advice is appropriate to you and your needs, before acting on the information. If you don’t know what your needs are, you should consult a trusted and licensed financial adviser who can provide you with personal financial product advice. In addition, you should obtain and read the product disclosure statement (PDS) before making a decision to acquire a financial product. Please read our Terms and Conditions and Financial Services Guide before using this website. The Rask Group Pty Ltd is a Corporate Authorised Representative (#1280930) of AFSL #383169.

At the time of publishing, Lachlan owns shares in Uniti Group.