TPG and the Magellan Infrastructure Fund could be high-quality ASX shares.
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There are some ASX shares that could be quality picks for the long-term at the current prices.
Some businesses are generating pretty predictable cashflow because of the nature of the underlying businesses.
These two ASX shares could be long-term opportunities:
TPG Telecom Ltd (ASX: TPG)
TPG is one of the largest telecommunication businesses in Australia with a market capitalisation of around $11 billion.
It’s the combined business of the old TPG business which merged with Vodafone Australia.
The TPG share price has fallen around 16% over the last six months, though it has risen more than 22% during the last six months, so it has gone through a bit of recovery.
TPG has a number of initiatives and strategic priorities.
For example, it recently launched ‘felix’, the first telco brand that is powered by 100% renewable electricity.
The business is working on the synergy benefits of bringing TPG and Vodafone Australia together. It’s targeting $70 million in 2021 alone, along with organisational integration.
The ASX share is trying to grow its share of converged households. It can sell both mobile and fixed broadband products.
TPG is also trying to make the most of its network infrastructure assets by providing compelling broadband services to more customers.
The final priority is to drive competition and growth in enterprise, government, wholesale with whole-of-business telecommunications solutions.
TPG will continue rolling out 5G to grow in the next phase of the telco industry.
Magellan Infrastructure Fund (ASX: MICH)
This is a fund that is concentrated on global infrastructure businesses. It’s actively managed to try to find investments that achieve attractive risk adjusted returns over the medium to long-term, whilst reducing the risk of permanent capital loss.
The ASX share is invested across a number of different sectors.
There’s 6% in airports, 9% in communications, 15% in toll roads, 8% in rail, 7% in energy infrastructure, 8% in gas utilities, 17% in transmission and distribution, 18% in integrated power and 6% in water utilities.
In terms of the actual businesses in the portfolio, its top 10 holdings (in alphabetical order) are: American Tower Corporation, Atmos Energy Corporation, Crown Castle International, Enbridge, Eversource Energy, Red Electrica Corporation, Sempra Energy, Transurban Group (ASX: TCL), Vinci and Xcel Energy.
Looking at the historical performance, after the annual management fee of 1.05%, the net returns over the last four years has ben 4.9% per annum. That’s 2.2% per annum better than the global infrastructure index returns over the same time period.
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Motley Fool contributor Tristan Harrison has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has recommended Magellan Infrastructure Fund. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.