'The one share I would buy and hold forever is…'

When legendary investor Warren Buffett finds a company that ticks all the boxes in his checklist, he ideally wants to buy and hold forever.

So it is perhaps no surprise that some of his core holdings have been held for decades. American Express, for example, was first purchased in 1964. Other long-term favourites include Coca-Cola and Wells Fargo. Both stocks were purchased nearly 30 years ago.

Some fund managers similarly have an ideal indefinite holding period. Others, however, put share price or valuation targets in place, and sell once these have been hit.

Here we ask four fund managers to name the one share, all things being equal, they could never imagine selling. All are Buffett-inspired in that they are quality businesses, which as well as operating globally are armed with intangible assets such as big brands or a unique product or service. In turn this helps set the business apart from competitors.

Merlin Entertainments

First up is Steve Davies, manager of the Jupiter UK Growth fund. Davies is a value investor, buying shares that have fallen by the wayside but that he thinks will in time recover.

But he also reserves around a quarter of the portfolio for "steady eddies" - businesses that he believes will continue to grow their earnings year in, year out, regardless of the economic backdrop.

His choice as a share he would be willing to buy and hold forever is theme park operator Merlin Entertainments. The company is the world's second largest visitor attraction operation behind Walt Disney, and is the company behind Legoland, Alton Towers and Madame Tussauds.

Davies said the firm is a market leader in its field, a position that he says will only be strengthened by the firm's plans to expand its footprint across the emerging markets.

"The firm is rolling out its Lego franchise in Asia, and it is going to be extremely popular. It is a business that is extremely good at what it does and I cannot see the company being threatened from a disruptor.

"There are not many companies in the FTSE 100 that are going to be able to grow consistently over the next 10 to 15 years, but I think Merlin is one that will," says Davies.

Unilever

Unilever, maker of Dove soaps and PG Tips, was picked by Hugh Yarrow, manager of the Money Observer Rated Fund Evenlode Income.

Like other equity income managers, Yarrow and his co-manager Ben Peters look for companies they believe will pay growing dividends over time. However, they look for a certain type of company that is "asset light" and doesn't spend too much on capital investment.

Yarrow says the firm is armed with big brands and has a meaty weighting to the emerging markets, which accounts for around 57% of the firm's revenues. It is extremely resilient, he adds, due to the fact that it sells repeat purchase products, including soap and deodorant.

In addition, says Yarrow: "Unilever has grown its dividend by more than 10% annually over the past 50 years. The yield may not be high today, at 3%, but it did recently increase its dividend by 6%. If the market shut for 20 years, it is the one share I would want to be holding."

Nestlé

Nestlé is the global food giant best known for selling chocolate, but it is the firm's drive to place a greater emphasis on developing nutritional products to improve health conditions that is exciting Gerrit Smit, manager of the Stonehage Fleming Global Best Ideas Equity fund.

"Nestlé has recently appointed an external candidate in Mark Schneider as its new CEO, who was formerly head of the German company Fresenius. This is the first time in 100 years that an external candidate has been hired.

"This to me indicates Nestlé is going to make a concerted effort to grow the health side of its business, which I view as a positive as it will help boost organic growth."

Smit adds that Nestlé has a track record for sustainably growing its top line, thanks to its strategic competitive edge, which is why it would be his number one choice as a share he could see himself holding forever, unless the valuation became excessive.

Geberit

A less familiar name perhaps, but Geberit products have a strong presence across Europe and also operates in America and Asia.

The Swiss firm manufactures products for bathrooms, for example sanitary systems and shower draining devices used in hotels and restaurants.

Alice Gaskell, manager of the BlackRock Continental European Income fund, says the business is well-managed, has high margins and generates plenty of cash.

"The firm is a dominant player in its market, and since IPO in 1999 has always paid a dividend. It is a share I have held since IPO and it has a strong strategic vision," says Gaskell.

This article was originally published by our sister magazine Money Observer here

This article is for information and discussion purposes only and does not form a recommendation to invest or otherwise. The value of an investment may fall. The investments referred to in this article may not be suitable for all investors, and if in doubt, an investor should seek advice from a qualified investment adviser.