I think long-term investing in ASX shares is the best chance of achieving positive returns and financial objectives.

Compounding is a very powerful financial force that can help grow our wealth over time, particularly if we don’t interrupt it unnecessarily by trading in and out of stocks and triggering capital gains tax.

We don’t need to own the absolute hottest ideas to achieve good results. I think the two ideas below are very strong options for long-term returns.

Washington H. Soul Pattinson and Co. Ltd (ASX: SOL)

Soul Patts is an investment house that has operated for over 120 years. It already has a great track record of surviving (and thriving) through recessions, the world wars, pandemics and so on.

It’s able to look across a wide array of asset classes, sectors and geographic markets for opportunities. I think that’s compelling considering the main local and global share market indices are increasingly focused on just the 10 or so largest businesses.

Soul Patts is invested in areas like energy, resources, telecommunications, financial services, agriculture, swimming schools, electrification, retirement living, building products, industrial property, land and plenty more.

I like how the portfolio has evolved over time and now includes newer ideas that can unlock the next 10 years (or more) of returns. Soul Patts is not stuck being a bank or retailer, it can buy or sell assets wherever it sees opportunities.

For example, it recently decided to include a ‘fixed income’ segment in its portfolio because of how high bond yields have risen.

I also like that the company is considering expanding its portfolio to international opportunities. This could produce stronger returns and deliver more diversification of risk.

Not only is the value of Soul Patts’ investments rising over time, but it’s also retaining some of its cash flow each year to make new investments. Funded by the majority of its cash flow, the ASX share pays a steadily growing dividend that has increased every year since 1998.

Global X S&P World Ex Australia GARP ETF (ASX: GARP)

This exchange-traded fund (ETF) is about investing in great businesses at a good price.

‘GARP’ stands for growth at a reasonable price. This strategy can lead to investing in compelling companies that are compounding their earnings at a good pace.

It owns a portfolio of 250 companies spread across multiple countries and sectors. I’m calling this an ASX share because it’s about investing in shares, and we can buy it on the ASX.

All of those stocks need to tick three boxes.

First, the shares must have solid sales and earnings growth.

Second, the value must look appealing on a price/earnings (P/E) ratio basis.

Third, to measure quality, the GARP ETF looks for healthy financial leverage (debt levels) and a high return on equity (ROE).

I think that combination of factors can lead to strong long-term performance. Since its inception in September 2024, the fund has returned an average of 16.4% per year.

I don’t know whether future returns will be as good as past returns, but I think it’s a compelling investment for the next decade. 

The post 2 top ASX shares to buy and hold for the next decade appeared first on The Motley Fool Australia.

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Motley Fool contributor Tristan Harrison has positions in Washington H. Soul Pattinson and Company Limited. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Washington H. Soul Pattinson and Company Limited. The Motley Fool Australia has positions in and has recommended Washington H. Soul Pattinson and Company Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

Broker UBS has released a bunch of new research reports this week, profiling companies across a wide spectrum of sectors.

I’ve selected three reports on companies which the broker believes will perform particularly well over the next 12 months.

Let’s see who they like.

DigiCo Infrastructure REIT (ASX: DGT)

This company is a data centre builder and operator, which has experienced a year of substantial share price swings.

The shares have traded as high as $3.07 and as low as $1.59 over the past 12 months, and are currently changing hands for $2.05.

UBS said recent highlights included DigiCo executing a 15 year contract for 71 megawatts of capacity at its SYD1 data centre with a global technology firm.

That data centre is now fully contracted, UBS said.

The broker said DigiCo’s expansion plans are fully funded, with no need to raise capital from equity.

UBS said it was also pleasing to see no change to the company’s forecast for underlying earnings this year.

UBS has a price target of $3.60 on DigiCo shares. If achieved, this would be a 76.5% upside.

Champion Iron Ltd (ASX: CIA)

UBS reduced its price target on Champion Iron shares after a weaker than expected September quarter preliminary result, but it still remains well above the current share price.

The broker said that the company’s volume recovery was good, however the net realised price for their iron ore was disappointing.

They said that the capture of premium pricing was tracking softer than expected, “driven by a combination of marketing execution, which the company controls to an extent, and elevated freight, which it largely does not, together compressing the net price realised”.

UBS added:

While management had guided premiums to build materially into Q3 to Q4 FY27, the weaker Q2 realisation has prompted us to adopt more conservative short to medium term freight assumptions, which flow through net realisation to drive our FY28/29 earnings cuts.

The broker has a price target of $3.60 on Champion Iron shares compared to $2.35 currently.

This would be a 44.7% increase if achieved.

Netwealth Group Ltd (ASX: NWL)

UBS said custodial net flows were soft for Netwealth, “reflecting ongoing budget related impacts on adviser activity combined with headwinds from higher interest rates”.

The broker said Netwealth offered compelling value at the current share price and was trading at a 43% discount to its five-year average.

UBS has a price target of $22 on Netwealth shares compared to $15.31 currently.

If achieved this would be a return of 43.6%.

The post 3 ASX shares UBS has tipped to increase 44% to 76% appeared first on The Motley Fool Australia.

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• Champion Iron posts $403.9 million Q2 FY2027 revenue in preliminary results
• DigiCo Infrastructure REIT locks in major SYD1 contract and reaffirms guidance

Motley Fool contributor Cameron England has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Netwealth Group. The Motley Fool Australia has positions in and has recommended Netwealth Group. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

The CSL Ltd (ASX: CSL) share price has been on a rollercoaster over the past year, trading as high as $221.76 and as low as $90.

The price has recovered well from those lows, and the shares are now changing hands for $193.89.

The question now is, how much are they worth into the future?

Broker says CSL shares are a good buy

Morgan Stanley has made a call on that value, which I’ll reveal shortly.

First let’s have a look at what’s driving their valuation.

The broker has called out two recent developments – agreements struck with Varm-X and Alentis for the development and commercialisation of VMX-C001 and lixudebart.

The most recent agreement, with Alentis, aims to develop lixudebart into a potential first-in-class treatment for people with rare kidney and liver disease.

CSL said in early October that the compound was currently being evaluated in a Phase 2 trial, “in patients with ANCA-associated vasculitis and rapidly progressive glomerulonephritis (AAV-RPGN), a rare and potentially life threatening auto-immune disease that can cause irreversible kidney damage and end-stage renal disease”.

CSL Executive Vice President Dr Bill Mezzanotte said the agreement, “reflects CSL’s commitment to building a leading global nephrology franchise, and our strategic intent to create high-value external partnerships”.

Morgan Stanley said it was factoring in an FY32 launch for lixudebart.

The other agreement is focussed on developing a treatment to restore blood coagulation in patients taking a Factor Xa inhibitor.

Morgan Stanley said they had factored both compounds into their financial assumptions going forward.

They said:

For VMX-C001, we include ~US$765mn of revenue by FY36, with a valuation contribution of ~A$8/ share. For lixudebart, we capture ~US$500mn of revenue by FY36, with a valuation contribution of ~A$3/share. Together, this provides EPS upgrades of ~2% in FY32 rising to ~7% in FY36.

CSL back on track

Morgan Stanley said, looking across FY26 and FY27, there had been improvement at the company.

They added:

More generally, we see the FY26 result and FY27 guidance as highlighting incremental improvement within CSL Behring, the key driver of group earnings growth over the medium to longer term (see here). Our forecasts imply solid underlying NPAT growth, supplemented by an ongoing buyback program (EPS growth of ~8% p.a. over FY28-30). CSL trades on 20.6x our 12-month forward underlying EPS forecast, with further multiple expansion contingent on commercial delivery and R&D pipeline expansion.

Morgan Stanley has a price target of $200 on CSL shares, up from $182, compared to $193.89 currently.

The company is currently valued at $92.2 billion.

The post Morgan Stanley just upgraded their CSL share price target appeared first on The Motley Fool Australia.

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Motley Fool contributor Cameron England has positions in CSL. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended CSL. The Motley Fool Australia has recommended CSL. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.