"If you aren't willing to own a stock for 10 years, don't even think about owning it for 10 minutes," billionaire investor Warren Buffett advised shareholders in his annual letter in 1996, reinforcing the need to focus on the long term.
Two companies that could be great buys for not just one decade but perhaps two or more are Alphabet (GOOG -1.10%) (GOOGL -1.23%) and CRISPR Therapeutics (CRSP -1.98%). Here's why these two could keep growing for years and years.
1. Alphabet
Having one or two good assets for a business to build around is often all that's needed for long-term success. While Alphabet has often ventured off into many side projects (Google Wave, Google+, and many others in the Google graveyard), at its core, the business just needs YouTube and Google Search to continue growing.
These are two solid assets the company can build on and develop. Although they are still largely the same as they were decades ago, there have been subtle but important changes that can lead to more growth.
On YouTube, for example, Alphabet has made it easier to click a link in a video to make a purchase. Last year, YouTube announced a partnership with Shopify allowing the e-commerce platform's merchants to sell their products via livestreaming, a video, and on a store tab. If YouTube helps drive more revenue, there's more of an incentive for advertisers to promote on the platform.
Meanwhile, on the search side, the company is integrating artificial intelligence (AI) through the Bard chatbot, which could also enhance the already strong results Google Search provides its users. While there is some concern that Microsoft could have a leg up with ChatGPT and its investment in OpenAI, Google has been a leader in search for decades, and that's not a position it will give up easily.
Those two key assets are why Alphabet can still be a growth beast for decades, and they are big parts of the company's operations today. In the last three months of 2022, Google Search and YouTube ads generated a combined $50.6 billion in revenue, two-thirds of the company's top line.
As long as those businesses remain pillars for Alphabet -- which I expect they will -- this is a company that should continue to generate strong growth for not just years but decades.
2. CRISPR Therapeutics
Gene-editing therapies could be big moneymakers for decades. They are such game changers that it's justifiable for these treatments to come in at well over $1 million and for health officials to still believe that they can be cost-effective.
CRISPR has been working on a gene-editing therapy, exa-cel, with Vertex Pharmaceuticals, that is potentially a functional cure (meaning there's no need for ongoing treatment) for sickle cell disease and beta thalassemia. Sickle cell disease can cause significant organ damage and possibly lead to death, so the costs on the healthcare system can be massive.
According to the non-profit Institute for Clinical and Economic Review, even at $1.9 million for the one-time treatment, exa-cel would be cost-effective and thus justifiable at that price. This doesn't mean that will be the treatment's price, but it highlights just how important exa-cel could be. And at that kind of a price tag, it's easy to see why the treatment could be a game changer for CRISPR, which will share in the profits with Vertex, with CRISPR taking 40%.
The companies recently completed their Biological License Application for exa-cel to the Food and Drug Administration, and an approval could be coming within the next 12 months.
The treatment, if approved, could be a source of growth for CRISPR for years to come. And with the company working on many other therapies in its pipeline, this has the potential to be one of the next big healthcare companies.
Buying the stock now, while its valuation is around $4.2 billion, could be a great move for long-term investors. Multiple brokerages have set price targets of at least $70 for the stock, suggesting an upside of 30% or more from where it trades right now -- and price targets typically only look at the next 12 months. The potential returns for investors over decades could be much more significant.
