The Motley Fool

The UK’s top money managers have been buying these 3 stocks

The content of this article was relevant at the time of publishing. Circumstances change continuously and caution should therefore be exercised when relying upon any content contained within this article.

Businessmen teamwork brainstorming meeting.
Image source: Getty Images

When I’m looking for stocks to buy for my portfolio, I often view what trades professional money managers are making. I find that this is a great way to generate investment ideas.

Here, I’m going to highlight some key trades they’ve been making recently. Should I buy these stocks for my own portfolio?

5 Stocks For Trying To Build Wealth After 50

Markets around the world are reeling from the coronavirus pandemic… and with so many great companies trading at what look to be ‘discount-bin’ prices, now could be the time for savvy investors to snap up some potential bargains.

But whether you’re a newbie investor or a seasoned pro, deciding which stocks to add to your shopping list can be a daunting prospect during such unprecedented times.

Fortunately, The Motley Fool UK analyst team have short-listed five companies that they believe STILL boast significant long-term growth prospects despite the global upheaval…

We’re sharing the names in a special FREE investing report that you can download today. And if you’re 50 or over, we believe these stocks could be a great fit for any well-diversified portfolio.

Click here to claim your free copy now!

Blue Whale

Let’s start with boutique investment management firm Blue Whale. It runs the Blue Whale Growth fund, which has delivered excellent returns for investors since its launch a little over four years ago.

Here, portfolio manager Stephen Yiu has been adding to his position in semiconductor manufacturing equipment maker ASML (NASDAQ: ASML). Yiu believes ASML, which sells its equipment to the likes of Taiwan Semiconductor Manufacturing Company, Samsung, and Intel, is “well-positioned to benefit disproportionately from the almost 25% expected yearly growth in demand for smart and connected devices going into the next decade.”

Would I buy ASML for my own portfolio? Yes. I actually bought some stock last month when it was trading near $740. My view is that with governments looking to build semiconductor manufacturing plants domestically, ASML is well-placed for growth.

It’s worth noting that its shares aren’t cheap. Currently, the forward-looking P/E ratio is about 55. This adds risk. However, I’m comfortable with the valuation as ASML basically has a monopoly position in its market.

Baillie Gifford

Next up, Baillie Gifford. It runs the very popular Scottish Mortgage Investment Trust as well as a number of other top-performing growth funds.

Looking at the investment manager’s latest 13F filing, it’s interesting to see it has recently been buying shares in fitness equipment company Peloton (NASDAQ: PTON). In the third quarter of 2021, the firm snapped up 7.9m PTON shares, increasing the size of its holding by nearly 40%. 

This is a stock I’m happy to avoid for now as the company is struggling a bit. This is illustrated by the fact that it generated a huge loss in the most recent quarter and also cut its revenue guidance for the last quarter of 2021 by $1bn.

It’s also worth pointing out that Peloton’s management is still confident about the long-term growth story. I think there are better stocks to buy right now however.

Fundsmith

Finally, we have Fundsmith, which runs the UK’s most popular fund, Fundsmith Equity. Its latest factsheet reveals that, in October, the fund completed the purchase of a position in Amazon (NASDAQ:AMZN). This is a stock fund manager Terry Smith has had his eye on for a while. It seems he finally sees the valuation as attractive.

Would I buy Amazon shares for my portfolio today? Yes. The stock has lagged the market this year and I think the share price weakness has provided a good buying opportunity. Of course, the stock isn’t cheap at 70 times next year’s expected earnings. However, I’m comfortable with that multiple given Amazon’s dominance.

I’ll point out that Amazon does have a few challenges to work through in the near term. Supply chain issues and wage inflation are two issues the company is dealing with right now. These could impact near-term growth.

I don’t expect these issues to last forever though. Eventually, they should dissipate and when they do, I think Amazon’s share price is likely to move higher.

“This Stock Could Be Like Buying Amazon in 1997”

I'm sure you'll agree that's quite the statement from Motley Fool Co-Founder Tom Gardner.

But since our US analyst team first recommended shares in this unique tech stock back in 2016, the value has soared.

What's more, we firmly believe there's still plenty of upside in its future. In fact, even throughout the current coronavirus crisis, its performance has been beating Wall St expectations.

And right now, we're giving you a chance to discover exactly what has got our analysts all fired up about this niche industry phenomenon, in our FREE special report, A Top US Share From The Motley Fool.

Click here to claim your copy now — and we’ll tell you the name of this Top US Share… free of charge!

John Mackey, CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. Edward Sheldon owns shares of ASML Holding, Amazon, and Scottish Mortgage Inv Trust and has positions in Fundsmith Equity and Blue Whale. The Motley Fool UK has recommended ASML Holding, Amazon, and Peloton Interactive. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.

Our 6 'Best Buys Now' Shares

Renowned stock-picker Mark Rogers and his analyst team at The Motley Fool UK have named 6 shares that they believe UK investors should consider buying NOW.

So if you’re looking for more stock ideas to try and best position your portfolio today, then it might be a good day for you. Because we're offering a full 33% off your first year of membership to our flagship share-tipping service, backed by our 'no quibbles' 30-day subscription fee refund guarantee.

Simply click below to discover how you can take advantage of this.