There is a persistent misconception that investing is a difficult and complex exercise that requires significant brain power. While it is true that some analytical and critical thinking skills are required, the basic principle of investing is easy to understand: buy big companies and hold them for the long term. as they continue to grow.
A lot of success consumer companies are represented by brands, products and services that we use every day. As consumers, we regularly use products and services without even realizing that they are provided by public companies. This familiarity makes it much easier for an investor to relate the business to the product, brand or service. With this ease of understanding, it is easier for investors to invest money in these companies.
Here are three actions that I think everyone will find easy to understand.
Apple (NASDAQ: AAPL) probably doesn’t need more introduction. The personal electronics giant has grown from a struggling IT company in the 1990s to a giant today. Its iconic iPhone is now a ubiquitous accessory for nearly every working teenager and young adult, while its app stores are now teeming with programs and ideas from all walks of life. Apple has also designed a wearable device called the Apple Watch that can help you track your fitness stats, make payments, and communicate with your friends (via a paired iPhone, of course).
IPhone sales still represent around 60% of Apple’s total revenue and are strong, up 7.6% year-over-year for the company’s fiscal first quarter (which s end on December 28). The wearables division also experienced strong growth, up 37% year-on-year to $ 10 billion for the first time, proof that Apple is slowly but steadily diversifying its revenue streams.
Services are also growing in importance, accounting for 13.8% of revenue and increasing 17% year-on-year. Every time you subscribe to a service like Apple Music, Apple TV, or iCloud, the business earns you money from the subscription fee.
On your way to work, the airport, or just taking a walk, you’ve probably stopped at a Starbucks (NASDAQ: SBUX) store to grab a cup of freshly brewed coffee. The outlets also offer a dizzying array of food choices to accompany your cup of tea.
The company has experienced strong growth over the years and has expanded internationally as well, ending its first fiscal quarter on December 29 with 31,795 stores. Starbucks’ loyalty program garnered 18.9 million members, up 16% year-over-year.
Starbucks is actively opening new stores at home and abroad, particularly in China, which is seen as a potentially lucrative growth market. The company has seen its sales increase steadily over the past five years, from $ 14.9 billion to $ 26.5 billion, and with fewer short-term effects stemming from the coronavirus pandemic (COVID-19), should continue to experience strong growth. It’s something to think about the next time you sip your latte.
If you’ve ever observed a group of children playing with their toys, chances are some of these toys are from Hasbro (NASDAQ: HAS). Hasbro is one of the top three toy companies in the world and offers a range of iconic brands such as Power Rangers, Monopoly, Hot Wheels, Play-Doh and Magic: The Gathering.
The company has just completed its $ 3.8 billion acquisition of Entertainment One, the studio behind children’s favorites Peppa Pig and PJ Masks. In addition, it reported fiscal 2019 revenue growth of 3% to $ 4.72 billion, with the entertainment, licensing and digital division recording the largest year-over-year revenue increase of 22 %.
Hasbro also comes from renewed his agreement with Walt disney to make toys based on the popular Marvel and Star wars franchisees. This has the potential to increase the company’s revenue in the medium term, as both of these movie franchises are extremely popular and have a large following.
Stay up to date on the company
While the above three companies have easy-to-understand businesses, it’s still important for investors to stay on top of what’s going on within the company.
Apple and Starbucks will face short-term hurdles due to the spread of COVID-19 (including store closings or service changes), but they are expected to get away with it in the long term. Hasbro is looking to continue growing after securing the deal with Disney, while its acquisition of Entertainment One will also provide it with a portfolio of new brands popular with children.
But if you want to study large companies that have proven themselves in uncertain times, these three are a good place to start.
This article represents the opinion of the author, who may disagree with the “official” recommendation position of a premium Motley Fool consulting service. We are motley! Challenging an investment thesis – even one of our own – helps us all to think critically about investing and make decisions that help us become smarter, happier, and richer.[ad_2]