- Valuation the main hesitation to owning problem-solving Halma
- Amazon has far from run out of runway for growth
The best companies are often well known by investors so their shares aren’t cheap. However, when the magic ingredient of growth is present and management has a good strategy, then these not-so-hidden gems can still be well worth tucking away in a portfolio.
Halma (HLMA)
With a fantastic record of delivering organic growth, making shrewd acquisitions and being one of the most reliable dividend-payers on the London stock market, Halma is renowned as one of the best quality UK shares. Halma is a holding company with expertise in guiding the strategy for businesses under the umbrellas of its three main divisions: Safety, Healthcare and Environmental & Analysis. Positioned in growth areas of the economy and solving problems that customers must outsource to a trusted partner, the businesses Halma owns have delivered stellar growth down the years. This does mean that the shares are richly valued and the investment case for this quality company is sensitive to the discount rates investors apply in a changing interest rate environment.
Amazon.com (US:AMZN)
One of the most recognised companies in the world, there is nonetheless more to Amazon than meets the eye. Its delivery business operates on thin margins and is even loss-making in some places. Much of Amazon’s profits are contributed by Amazon Web Services (AWS), its cloud computing business. However, with some exciting developments to grow advertising revenue, several subscription businesses and potential for more to come from AWS, this remains a long-term quality compounder many investors are happy to own.
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