The idea with every investment I make is to hold the stock forever. That's not always possible, but I don't have any plans to sell when buying a stock. Some stocks stand out as companies I can see owning decades from now.
Three on the top of my list of stocks I will (probably) never sell are law enforcement and security company Axon Enterprise (AXON 4.53%), Walt Disney (DIS 2.40%), and Apple (AAPL 1.62%). Here's why they deserve to be held forever.
NASDAQ: AXON
Key Data Points
Axon
The company at the center of body camera footage we see today is Axon, but that's only a piece of the business. It started as the Taser manufacturer, moved to body cameras, and is now a cloud software company that catalogs crime reports.
Axon's product bundle starts with hardware sales of Tasers and body cameras, and it layers in high-margin software services from cloud storage, records management, and report writing. These products have led to the incredible revenue growth you see below.
AXON revenue (TTM) data by YCharts. TTM = trailing 12 months.
Management has forgone net income in the short term in pursuit of long-term growth, and that's been the right strategy. Now, income is starting to improve and the company is signing contracts with customers for as long as 10 years, which gives great revenue visibility to the business.
The valuation is steep, given the $14.1 billion market cap, but I don't see anything but growth for digitizing law enforcement data and records. And if Axon can move into the consumer market, as it plans to, this will be a big long-term winner.
NYSE: DIS
Key Data Points
Disney
There has been a lot of turmoil at Disney over the last year as streaming costs ballooned and CEO Bob Chapek was pushed out in favor of bringing back Bob Iger. But this is a healthy company in a changing media business.
No company can match Disney's reach across media. It has linear TV networks like ABC and ESPN, movie studios like Pixar and Marvel, one of the biggest streaming platforms, and a massive theme park business.
This combination makes for a waterfall-like value proposition for content. Start in the movie theater, move to linear TV and streaming, and eventually make rides and toys for theme parks.
As media moves to the internet age, it's more important than ever for a big company like Disney to make content that reaches a large number of people. It proved that ability with 5 of the top 10 movie releases in 2022, including Avatar: The Way of Water, which is the fourth-highest-grossing movie of all time at $2.1 billion.
It might take time to reach a more sustainable earnings profile, but I'm a long-term investor, and I don't see anyone knocking Disney off its perch as the top family media company.
NASDAQ: AAPL
Key Data Points
Apple
Arguably the most dominant tech company in the world today is Apple. The iPhone is attached to hundreds of millions of people every day, and that gives the company the ability to make money off services, app sales, and accessories like AirPods.
The iPhone also makes products like iPads and Macs more attractive to own. There's never been a company like it, and that's why Apple continues to grow and report incredible earnings year after year.
AAPL revenue (TTM) data by YCharts.
The question for this as a stock to hold forever is whether or not you think a device or technology will disrupt Apple. And I don't see that happening.
Virtual and augmented reality were supposed to be the next computing paradigm, but that largely failed to live up to expectations, and the iPhone's utility continues to increase. Given the simplicity and functionality of the smartphone, I see this being a dominant computing product for the foreseeable future. As a result, Apple will be a great company to own.
Shares aren't cheap at 24 times earnings, but even in this market, investors have to pay up for quality.
Management has shown over time it will buy back stock and increase the dividend. With a business as powerful as this behind it, there's no reason to sell Apple stock now.
Buy and hold forever
Each of these companies dominates its respective field and has a business that could be durable for decades. That's what it takes to be a stock I'll "never" sell.
