What Makes a Stock Worth Holding Long-Term?

MillionaireTiger
07-17
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Some investors aim to hold a stock for years — or even decades — but not every company deserves that level of commitment.

👉 What kind of stock is truly worth a long-term, heavy position?

One commonly used method is the PEG + PE approach, which helps assess both valuation and growth potential.

  • PE (Price-to-Earnings) shows how expensive the stock is right now.

  • PEG = PE ÷ Profit Growth Rate (%) helps judge if the price is fair based on how fast the company is growing.

📊 PEG < 1 suggests the stock may be undervalued.
📊 PEG > 1 could mean it’s priced too high for its growth rate.

Example:

  • PE 20 with 40% profit growth → PEG = 0.5 (potentially undervalued)

  • PE 50 with 30% growth → PEG = 1.67 (potentially overvalued)

This method encourages looking for companies with strong, steady growth at reasonable prices.

🔍 Discussion Time

  • What key factors help decide whether a stock is worth holding long-term?

  • Any examples of stocks that turned out to be great (or not-so-great) long-term bets?

👇Share your thoughts and let’s learn from each other’s perspectives.

Disclaimer: Investing carries risk. This is not financial advice. The above content should not be regarded as an offer, recommendation, or solicitation on acquiring or disposing of any financial products, any associated discussions, comments, or posts by author or other users should not be considered as such either. It is solely for general information purpose only, which does not consider your own investment objectives, financial situations or needs. TTM assumes no responsibility or warranty for the accuracy and completeness of the information, investors should do their own research and may seek professional advice before investing.
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Comments

  • koolgal
    07-18
    koolgal
    🌟🌟🌟I believe the key factors for my long term stock holdings would be strong financials, durable competitive advantage like brand power and exposure to megatrends like AI.  Another key factor would be strong leadership.

    A good example would be Nvidia $NVIDIA(NVDA)$.  It ticks all the boxes in the key factors for my holding the stock long term.  CEO Jensen Huang exemplifies strong leadership as he has a visionary approach.  That is how he has catapulted Nvidia as the most valuable company in the world with Assets Under Management of over USD 4 Trillion!  What an  amazing leader!  That is why I have invested in Nvidia.

    @MillionaireTiger @Tiger_comments @Tiger_SG @TigerStars @CaptainTiger

  • nomadic_m
    07-20
    nomadic_m
    When I am evaluating long term stock opportunities, I focus on the company's financial health, including its revenue growth, profit margins, and return on equity, as well as its competitive advantage, industry trends, and management team's track record, to determine if it has the potential to sustain long-term growth and outperform the market.

    Examples of US stocks that turned out to be great long-term bets include:
        - * $Microsoft(MSFT)$ *: Tech giant with solid financials, expanding cloud and AI capabilities.
        - * $NVIDIA Corp(NVDA)$ *: Leader in graphics processing units and artificial intelligence computing.

    On the other hand, some not-so-great long-term bets might include companies with:
    - *Poor Financial Health*: High debt, declining revenue, or inconsistent profitability.
    - *Weak Industry Trends*: Companies in declining industries or with limited growth prospects.
    - *Poor Management*: Ineffective leadership or questionable capital allocation decisions.

  • BenjiFuji
    07-19
    BenjiFuji
    Here are some points for consideration:
    1. Deep and wide moat - won’t be disrupted by competition they are the entrenched norm, think $Microsoft(MSFT)$.
    2. Huge total assessable market - like AI still has a lot more room to grow. Think $NVIDIA(NVDA)$
    3. Visionary leadership with strong execution - think Steve Jobs with $Apple(AAPL)$
    4. Consistent innovation - think $Taiwan Semiconductor Manufacturing(TSM)$
    5. Build to last culture - think Warren Buffet and $Berkshire Hathaway(BRK.B)$


    What do you think? [Grin]
  • ECLC
    07-19
    ECLC
    Strong stocks able to pay good dividends are worth holding long term. Not selling at ATH prices. Looking forward to next round of dividends from DBS, UOB, OCBC next month.
  • LiverpoolRed
    07-18
    LiverpoolRed
    I am looking at the company revenue and profit growth evey years. It need to have minimum of 10%. That why I had bought and hold the share for this company $ResMed(RMD)$ . I had bought it seem year 2008. It had been growing steadily for the past 17 years.
  • MHh
    07-18
    MHh
    I generally look at earnings to determine the potential of the company. If the company can beat analyst expectations, I would take a look at the company. If the company is fundamentally sound, I will wait to get it at a good price. I also prefer to look at macro factors like the potential of the industry and whether there will be governmental support for the industry, can specifically for the company.


    However, this method didn’t work out well for BYD. Market leader and is an industry the Chinese government wants to support, and also making inroads into a big market like Indonesia. There is no predicting that byd would slash prices and spark of a potential price war. The fear of a price war did not materialise but the price of byd still remains stuck. I will continue to hold it as it is still the market leader for both car and its superior battery.
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