Buy Hold Sell: 5 ASX ‘stayers’ to go the distance

A few good years can make a business look like a long-term winner. But what gives it the staying power to keep delivering over the next five or 10?

It’s an appealing prospect for investors: find a handful of businesses that can keep growing their earnings, hold on, and give compounding time to work. The challenge is recognising which companies have that endurance – and how much you should pay to own them.

With the Spring Racing Carnival upon us, we’re turning our attention to the ASX’s ‘stayers’ – businesses that can keep delivering for shareholders over the long haul. Our field includes Wesfarmers (ASX: WES), REA Group (ASX: REA), TechnologyOne (ASX: TNE), BHP (ASX: BHP) and Pinnacle Investment Management (ASX: PNI).

Joining me to assess the contenders are Nick Pashias from Antares Elite Opportunities Fund and Luke Laretive from Seneca Australian Small Companies Fund. We explore what separates a genuine long-term compounder from a business that’s simply enjoyed favourable conditions, and what could convince them to sell a company they once intended to keep.

Then we put all five stocks to the buy, hold or sell test. Which would they back from here?

This episode was filmed Wednesday 28th October, 2026. 

Other ways to listen

• Spotify
• Podbean

Edited transcript

Patrick Poke: Hello and welcome to Livewire’s Buy Hold Sell. I’m Patrick Poke, managing editor at Livewire Markets.

With the Spring Racing Carnival upon us, today we’re looking for the stayers: businesses that could keep delivering for shareholders over the long haul. But even a proven performer can be a poor investment at the wrong price.

Joining me to assess the five contenders are Nick Pashias from Antares and Luke Laretive from Seneca.

What makes a long-term compounder?

Patrick Poke: Nick, what separates a true long-term compounder from a business that’s simply had a few good years?

Nick Pashias: It’s a good one, Patrick. We’re looking for companies that have recurring, stable revenues and a variable cost base, because if you’re going to own it for the long term, something will invariably go wrong over that period.

We want a strong balance sheet – not just low debt, but strong liquidity. Sometimes that causes companies to come unstuck.

The final one is not so much about management, but more around governance. I think having strong governance is an important criterion for those compounders.

Patrick Poke: Luke, what would make you sell a business that you bought intending to hold it for the next decade?

Luke Laretive: Very rarely do we intend to hold a business for a decade. But certainly, when we’ve got a thesis breach, those are easy sells for us.

Governance is critical. Businesses that you can’t trust, businesses that aren’t transparent with their investors, businesses that don’t act in the interests of their shareholders, stakeholders and the wider community – that’s always a real red flag for us.

It’s an immediate recalibration of how we think about that business and value it, and that usually results in us being able to dump that stock pretty quickly.

Wesfarmers (ASX: WES)

Patrick Poke: Nick, first up is Wesfarmers. Bunnings can help you build a deck, but can they help you build a portfolio? Buy, hold or sell?

Nick Pashias: (SELL) No doubt Wesfarmers is a great conglomerate. They’ve been doing it for a long time. They have a very good business, governance, all of those things. But as you touched on earlier, a great business is not always a good investment, and now is one of those times.

We’re going into a housing downturn – that’s undeniable. Bunnings and Kmart are struggling to grow. They’re growing about 5% per annum, and for that you’re paying 30 times.

The overall business is growing a bit faster than that, but it’s the lower-PE businesses in Wesfarmers that are growing, giving you that 7.5% growth. So for us, at this point of the cycle, it’s a sell.

Patrick Poke: It’s got a strong position, but can it hold on to that position, especially given the size of the business? Buy, hold or sell for you, Luke?

Luke Laretive: (SELL) It’s going to result in my Western Australian passport getting revoked, but it’s a sell from me.

Quite similar to Nick: a great business in theory, but it’s on 28–30 times earnings, depending on your numbers, and 43% of earnings come from Bunnings.

You’re in a cost-of-living crisis. You’re not going to be out there spending squillions on renovating your house or doing major spending at Bunnings. Bunnings will take 200 bucks as soon as you walk in the door. I think that’s a risk in terms of its growth profile.

Then you think about what Kmart does, which is roughly 25% of their revenue. All those random bits of discretionary spend are a pretty competitive marketplace, and increasingly competitive with Temu, Amazon and almost every other internet retailer at the moment. I think it’s a pretty hard place for Kmart to be.

I also think there’s value in retailers. While the consumer is stretched, there are pockets of really interesting parts of retail. We look at health and wellness, the little-treat economy and, more and more, the travel sector as places where people are still willing to spend money.

It’s not like we don’t have any retailers in the portfolio. We’re long Universal Store; we’re long Lovisa. These businesses have a proven format of store rollouts. I just don’t think that, at almost double the multiple, Wesfarmers is the best buy.

https://vote.easypolls.net/6ae812a980245d0061355d0f 

REA Group (ASX: REA)

Patrick Poke: Next up is REA Group, the business behind realestate.com.au. A dominant position in the Australian property advertising market.

Luke Laretive: Undoubtedly.

Patrick Poke: Is that a buy, hold or sell for you?

Luke Laretive: (BUY) It’s a buy at these prices for me, Patrick. Sixteen times EV/EBITDA is compelling.

I think you have to ask yourself: do you think property volumes are going up from here, or are they going down and it’s going to get worse?

Our view at Seneca is it’s not going to get a lot worse. I think REA’s valuation typically trades with those volumes, so from an investment perspective, you have to take a view on that major data point.

From our perspective, it’s skewed to the upside, and definitely skewed to not getting a lot worse.

This is a business you can buy now on a 2015 valuation. Back in 2015, it was doing $2 of cash flow per share. It’s now at $7 of cash flow per share.

Yield is up 3.7 times over that period. A thousand bucks spent on the platform in 2015 is now $3,700 per listing.

It’s a really good business. It’s grown dramatically, it’s grown market share, and it’s seen really no competition. I think data out today shows Domain’s doing even worse than ever, despite the big investment that was made in them.

I think REA’s a buy. It is countercyclical; it’s a little bit contrarian at the moment. It’s certainly not a momentum trade, that’s for sure.

At these levels, I just don’t think you get to buy a business in this sort of competitive position too often at these prices.

Patrick Poke: REA Group has a dominant position in its market, much like Wesfarmers. Do you think they still have room to grow?

Nick Pashias: (SELL) I think it’s a cyclical stock masquerading as a growth stock, and we’re about to find out.

It’s the first time in 15 years that home prices in the capital cities across Australia are falling. It’s going to be a real test for them to see whether they can generate that pricing power they’ve historically enjoyed, which Luke touched on. That, I think, is the key.

I understand the looking-forward aspect, but we are observational investors, in a sense – OI, not AI. We look at things now, and right now volumes are falling and continuing to fall. Their recent update last week showed, again, a deterioration in those volumes.

We don’t think we’re through the other side. We still think we’re heading down, and the pricing power they’ve enjoyed historically is certainly under question.

I get that the Domain numbers they released last night were not great, but they are a more invigorated competitor. They’re spending more on marketing. They’re holding pricing at a 4% cap, whereas REA is trying to grow at double digits.

If you look historically – and it came out in their result or their investor day pack last week – a large part of their pricing growth has been because house prices have gone up.

That may not be the case, at least for the next six or 12 months. So just a bit of caution at this point in time. Looking for a better entry.

https://vote.easypolls.net/6ae812e547011d0062302025 

TechnologyOne (ASX: TNE)

Patrick Poke: From property advertising to enterprise software. Nick, their customers rely on them for running their businesses. Would you put TechnologyOne at a buy, hold or sell?

Nick Pashias: (SELL) It’s a sell purely because of the valuation. The business model is great. It’s on 60-plus times earnings, and you get mid-teens growth. That puts the PE-to-growth ratio at about 3.5, which is pretty hard to make a return on.

No doubt they are one of the best-managed IT companies on the boards, but they just haven’t derated to the extent that others have. Maybe that’s because of their customers: government and semi-government bodies, which are more stable.

We would just prefer to see it at a lower level. Not there at this stage, so not for us.

Patrick Poke: Luke, how do you weigh up the recurring revenue they have versus the high multiple we’ve just discussed?

Luke Laretive: (SELL) You can look at lots of businesses with recurring revenues that don’t trade on 50 or 60 times earnings.

Your job as an investor is to find the best expression of an idea, the best alternative available to you. As Nick said, I just don’t think TechnologyOne at that price for mid-teens growth is a great deal.

You only need to look internationally. I had a quick look at US and European stocks trading with similar long-run growth profiles and similar 15%-plus ROE numbers.

You can buy Oracle, Keysight, Netflix, Caterpillar, ASML and Nvidia, all on lower multiples with higher ROE and better growth.

From my perspective, it’s just not a great deal. I’m not an international investor, but you catch my gist.

There’s a whole litany of decent recurring-revenue, large-addressable-market software or technology-adjacent businesses on the ASX at five times sales, rather than paying 20 times for these at the moment.

So it’s a sell from me. There are plenty of other good tech stocks on the ASX or around the world.

Patrick Poke: Pretty crazy when you put it in the context of being more expensive than ASML. It’s quite the quality business there.

Luke Laretive: We think TechnologyOne is a decent business, but I think people think it’s much higher quality than we do, at least.

https://vote.easypolls.net/6ae8130480245d0061355d48 

BHP (ASX: BHP)

Patrick Poke: Let’s go to the miners. We’ve got BHP, the Big Australian. Their assets last for decades, but can a cyclical miner like BHP earn a place in your portfolio for the long term? Buy, hold or sell?

Luke Laretive: (HOLD) It’s a hold for me, and it probably speaks to the fact that we’re a benchmarked active manager, so we have to hold BHP almost always. It’s 10.6% of the ASX 200 at the moment.

That being said, we are materially underweight at the moment.

Copper’s still trading at all-time highs, and a lot of people are still excited about BHP’s copper prospects. But the main thing with BHP is always iron ore, and iron ore looks like it’s about to go through a significantly weak period.

At seventeen times, BHP’s not cheap by anyone’s metrics. That’s one standard deviation above average, just for some context.

It really comes down to flows and where you think the money is going to go next. If you think the next bull market on the ASX is going to be driven by lower and falling interest rates, it’s probably going to be the banks that are the winners in that environment, on one end of the barbell.

If you think it’s going to be a growth-driven rally – maybe an end to the war, decreasing freight rates, decreasing fuel rates – then maybe it’ll be more the miners, and the BHPs and Rios will do better.

We don’t have a particular view on that. From our Australian shares portfolio perspective, we’re just more constructive on other companies in resources across the ASX 300 – coal, uranium, base metals and gold – than BHP at seven times.

Patrick Poke: Do the projects coming online in Africa at the moment factor into that for you, in terms of how they might affect the global market for iron ore?

Luke Laretive: Definitely. The supply-side story is much talked about and much hyped. I’m always reticent to get too carried away with short-term supply.

My experience working in the mining industry is that the market starts to price these projects like they’re fully ramped up and working, and everything goes smoothly. In reality, building a mine, particularly a large-scale iron ore mine, has significant challenges even in tier-one jurisdictions, let alone in some parts of Africa.

While I wouldn’t get too carried away with my bearish thoughts around iron ore pricing on the back of some huge immediate impact on supply, I think there’s enough cause for concern that prices stay below average – or definitely below recent prices – for a year or two from here.

Patrick Poke: Nick, where do you see the next decade of growth coming for BHP? Is that a buy, hold or sell?

Nick Pashias: (BUY) We think it’s a buy. I share Luke’s sentiment on a number of things, but let’s go through them.

Copper is the zeitgeist of the current market. It’s where everybody wants to be, and BHP has a significant endowment of copper.

They obviously produce out of Escondida and Copper South Australia, but they’ve got this Vicuña project which will come online towards the end of this decade, into the next decade, that will give them significant growth.

The copper story is not just around AI and demand. It’s also a supply issue. You saw just last night that Freeport, one of the world’s biggest producers of copper, downgraded its production guidance again.

This is a global phenomenon. They’ve all done it over the course of the last few years. It’s just not that easy to mine things out of the ground, let alone copper. So we think the copper price is well supported.

In terms of iron ore, BHP enjoys a privileged position right at the bottom end of the cost curve, particularly on a free cash flow basis when you look at it after capex.

There are C1 costs of around $20, freight rates on top of that and a few other costs, but it’s a long way from even the $80 iron ore price we see today. They’re going to make great margins out of that business.

Just meeting with one of the majors earlier today, there’s already supply coming out of the market. It’s coming out from Chinese suppliers, given that at these prices they can’t make money. Some of the high-cost Brazilian mines are starting to come out of the market too.

Fuel is a big input to freight costs. Freight rates from Brazil to China are like $35 a tonne. That’s a big hurdle to jump over for some of those high-cost producers.

We think iron ore is going to be okay. We don’t think it will fall much further from these levels.

Then you’ve got Jansen. Jansen is this troubled project that BHP has spent far too much on, but it’s in the price.

It’s not contributing a cent to earnings today, but it will in 12–18 months. It will start to ramp up. Jansen is a potash production hub. It’s really global scale, low cost.

It introduces a new commodity to the BHP suite, which should diversify their revenue base. We think over time that will lead to a rerating of BHP because it’s more diversified. It won’t have the significant ups and downs that a pure-play lithium or copper producer will have.

That’s our thesis over the long term.

https://vote.easypolls.net/6ae8132080245d0061355d5d 

Pinnacle Investment Management (ASX: PNI)

Patrick Poke: Why don’t we turn to the asset management industry, one we’re all familiar with here? Pinnacle: has it got further to climb, or does the name tell us where we’re at? Buy, hold or sell?

Nick Pashias: (SELL) We think it’s a sell, and we’re worried about the contagion risk that Metrics brings to the group.

They all sit on this wonderful distribution platform, and we worry that maybe there’s a bit of contagion filtering in. We just prefer at this stage to stand back. It’s had a fall. We’re looking at it, but we’re not convinced that all of it’s in the price.

This is a high-beta play on markets. We’ve got interest rate rises, we’re having choppy markets, it makes it harder to get inflows and it makes it harder to generate performance fees.

These are the things this low-capital-intensity business has benefited from historically, hence the high multiple. But now we see some of those headwinds still with us, so it’s a sell for the moment.

Patrick Poke: Luke, how much do you think they rely on the ability to generate those performance fees to remain profitable and grow their profits? Is it a buy, hold or sell for you?

Luke Laretive: (SELL) It’s a sell for me. I don’t think they need performance fees to stay profitable. As Nick touched on, this is a very capital-light model.

The concept of distribution for fund managers is really smart. You essentially get all the benefits of being a fund manager without any of the costs. So let’s not get it twisted.

I do think there’s a lot of value in fund managers at the moment because the market’s in a bear market. As Nick touched on, it’s hard to get an inflow, it’s really hard to generate a performance fee, and as a result Pinnacle’s come down from 37 times to 16 times.

In a vacuum, that sounds pretty good to me, and I’d probably be sniffing around, thinking, “Here’s a countercyclical buy.” But it’s still a sell from me.

I’ll tell you why: a similar business in Regal is trading on six times earnings at the moment, with a 13.3% dividend yield. To me, that is a much better alternative.

Pinnacle’s great, but it’s still expensive relative to the other alternatives on the market you can compare it to.

Patrick Poke: Do you think the diversified nature of the business accounts for that difference?

Luke Laretive: I think the diversified nature of businesses like this is actually less of a benefit than the market likes to talk about.

At the end of the day, investor confidence is investor confidence. What they get confident in changes all the time, but typically inflows across every asset class are pretty correlated.

From my perspective, I don’t think Pinnacle’s got a particular advantage over Regal, for example, which also has a range of asset class exposures.

I just think Pinnacle maybe sold a better story for a bit longer.

https://vote.easypolls.net/6ae8134580245d0061355d70 

Patrick Poke: That’s our field of five. Luke, Nick, thanks for joining us.

Subscribe to the Livewire YouTube channel or visit livewiremarkets.com for more content like this. And let us know in the comments: which business would you like to own if you had to hold it for 10 years?

Which ASX business would you choose if you had to hold it for the next 10 years? Let us know in the comments.