Small- and mid-cap stocks are ideal for long-term investments. These companies are small and have long runways for growth ahead. Likewise, given that they are relatively unknown to the broader market, you can pick them up at attractive valuations. An investor can enjoy years and even decades of growth from a small-cap stock that executes a great business plan.
If you are looking for some small- and mid-cap stocks that could deliver years of growth to come, here are three I would consider owning now.
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Firan: A top small-cap stock for years to come
Firan Technology Group (TSX: FTG) has a market cap of only $286 million. While its stock is up 638% in the past five years, it still could have more room for steady returns ahead.
Firan manufactures specialized circuit boards and cockpit components for the aerospace industry. To be honest, it is not the most exciting business. However, the company has a good track record of steady growth and prudent capital allocation.
The airline industry has a massive backlog from elevated demand for new aircraft. This should be a decade-long tailwind for Firan. Recent acquisitions have expanded its technology and advanced its position with the world’s largest aircraft manufacturer.
Firan plans to grow earnings by a 15% annual rate. In recent years, it has exceeded this target. For a well-managed, steady business, Firan is a great buy for a forever hold.
Colliers: A top Canadian mid-cap for the long haul
Colliers International Group (TSX: CIGI) is quite a bit larger with a market cap of $10 billion. This stock has compounded at a 17% annualized rate in the past 10 years and 14% over the past 20 years. It has delivered for long-standing shareholders.
The good news is that this record should continue. Colliers was once mainly known for its commercial real estate brokerage business. However, today it is so much more. It has built out platforms in real estate services, engineering/advisory, and investment management.
Each of these is growing to become a strong, independent business. This year, Colliers made some substantial acquisitions that greatly enhanced these platforms.
The market has yet to appreciate Colliers’s significant transformation to higher margin, recurring revenue services and income. As a result, Colliers has a value aspect to it. Like Firan, Colliers has a highly invested and shareholder-aligned management team. It’s a great stock for a forever hold.
TerraVest: A stock for the decades
A final stock worth holding for decades is TerraVest Industries (TSX: TVK). It has a $3.7 billion market cap. This stock is up 1,020% over the past five years!
Like the other stocks above, it is not a flashy business. It operates industrial businesses focused on manufacturing tanks, boilers, specialized trailers, and energy services. What differentiates TerraVest is its ability to efficiently operate these companies and generate substantial free cash flows.
It can then deploy that cash into acquiring more industrial businesses, often at very attractive valuations. TerraVest still has a large market to keep consolidating. It has a young CEO and a smart operating team. This is another type of stock you want to find earlier on and hold for several decades to come.
