Patience is something that every investor needs, but unfortunately, few possess. We all want instant gratification, those quick profits when one of our holdings beats earnings estimates or gets acquired. But when investors specifically seek out those situations, it’s easy to get burned in the long run.
The stocks listed below are a little different. The near term is full of uncertainty, and could end up being very volatile. And these companies are certainly not takeover targets. But if you’re willing to hold on to them for many years, the odds are much more likely to be in your favour.
Uranium miner Cameco (TSX: CCO)(NYSE: CCJ) is a company that has tested investors’ patience for over three years now, ever since the Fukashima disaster in Japan. The result has been slumping demand and prices for uranium, as well as a slumping share price for the company.
It looks like this will not turn around any time soon. In a recent interview, Cameco CEO Tim Gitzel said that the next 18 months will be very difficult for the uranium market. Delays in restarting Japan’s nuclear reactors are resulting in a supply glut that will take some time to work through.
But longer term, with uranium trading at about $30 per pound, Cameco’s competitors will have trouble competing, leading to an eventual reduction in supply and increase in pricing – as long as you’re willing to wait.
Investors’ patience has also been tested by the energy industry, especially with all the delays in Keystone XL’s approval. But this has resulted in some great long term opportunities.
One of them is Imperial Oil (TSX: IMO)(NYSE: IMO), mainly because it has some excellent assets. For example, its Cold Lake assets are one of the lowest cost operations in the entire industry, helping make Imperial more able to withstand the ups and downs of energy prices. And its Kearl oil sands project is one of the most environmentally friendly operations in the industry, which of course helps shield the company from regulatory risk and public backlash.
The company also has very long life assets – for example Kearl has a project life of about 40 years. This is a great benefit to investors, especially the ones willing to hold on for just as long.
Brookfield Asset Management
Alternative asset manager Brookfield Asset Management (TSX: BAM.A)(NYSE: BAM) has one of the best investment track records in Canada. And this has shown up in the company’s stock price, which has returned over 15% per year for the last 15 years.
The problem with Brookfield is that its share price has done especially well recently, tripling over the last five years. The shares are currently trading right at their 52-week high, and can hardly be called a bargain. But if you’re willing to hold the shares for another 15 years, you just need Brookfield’s team to perform as it has done in the past. Again, this requires patience, but that’s a necessary trait of successful investors anyways.