The stock market has gotten off to a rough start in the first half of 2022, with the S&P 500 index falling 20% while the Nasdaq Composite has lost 28%.
Stock market sell-offs are tough to stomach. After all, it's not easy seeing investment portfolios lose value month after month. However, sell-offs are also opportunities for savvy long-term investors to buy stellar companies at lower prices. Here are three companies you can buy today and hold for the next decade.
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This massive asset manager has revolutionized passive investing
BlackRock (BLK 0.36%) is the world's largest asset manager, with more than $9.5 trillion in assets under management. The company has clients across 100 countries and offers a variety of products, including mutual funds, actively managed accounts, and passive investment options through its iShares ETF products.
BlackRock has been a big winner in the move toward passive investing, and has seen its AUM grow 14% compounded annually since 2017. The company's growth continued in the first quarter as it took in $86 billion in net inflows, helping AUM grow 6% from the same quarter last year. It also saw solid revenue growth of 7% and diluted earnings-per-share growth of 20%.
BlackRock has a strong foundation as the world's largest asset manager, and continues to benefit from investor flows into passively managed funds. The company's price-to-earnings ratio (P/E) of about 15 is down from its P/E ratio of 25 last year and below its 10-year average of 18.5. With the stock down 35% from last year, BlackRock looks like an excellent investment to add at a discount today.
Here's an active manager with a rock-solid balance sheet
T. Rowe Price (TROW 0.01%) advises individuals and managed funds on investments, and primarily focuses on active management. Despite stiff competition from passively managed funds, T. Rowe Price has grown its AUM 12% compounded annually during the past decade, spurring revenue and net income growth of 10% and 14% annually.
T. Rowe Price is a well-managed company with a strong balance sheet. The company has more than $2 billion in cash, and has rewarded investors with increasing dividends for 36 consecutive years. While growth has been solid, investors seem hesitant to invest in it, given its P/E ratio of 9 -- its cheapest valuation in more than 30 years. T. Rowe Price's solid growth in the face of headwinds and rock-solid balance sheet could make this another excellent addition to your portfolio at a deep discount.
TROW PE Ratio data by YCharts
This asset manager makes private equity investments
StepStone Group (STEP -1.34%) advises a range of institutional investors, including pension funds, sovereign wealth funds, insurance companies, and foundations, specializing in private equity, private debt, and real estate investments.
StepStone's advantage is its technology tools, including its StepStone Private Markets Intelligence (SPI) database, which has information on 72,000 private companies. The database initially started as an internal tool for management to track investments, but strong demand for private market data encouraged the company to make the tool available to clients. Other technology offerings include Omni and Pacing, which help clients analyze portfolio cash flow, investment allocations, and forecasting tools for private markets.
StepStone Group makes it easy for clients to invest in private equity. Since 2018 the company has seen its assets under management and advisement grow to $570 billion, an increase of 38% compounded annually, helping management and advisory fees per share grow 25% compounded annually over the time period. In its recent earnings report for the fiscal year ended March 31, the company's management and advisory fees grew 33% from the previous year.
StepStone is well-positioned as an asset manager specializing in private equity, and analysts project revenue growth of 62% next year and 23% in 2024. With a P/E ratio of 6.4 and a price-to-sales ratio of about 1, StepStone looks like a stellar company to buy at a discount and hold for the next decade.
