FTSE 100 company Hargreaves Lansdown provides UK investors with one of the most popular investment platforms available.
And I love exploring the firm’s website for the insights it often produces.
For example, the firm posts a list of the most-traded FTSE stocks on its platform over the past week or so.
I’m writing this on 5 September 2023, and the current top three makes interesting reading.
A turnaround that’s turning
The most-traded stock is Rolls-Royce Holdings (LSE: RR) with more buys than sells on the Hargreaves Lansdown platform.
The engine maker supplies the civil aerospace, defence and power systems markets. And a big part of its earnings comes from providing aftermarket services.
The lockdowns and aircraft grounding events of the pandemic devastated earnings and cash flow. And the company needed to refinance to survive.
But with the recovery in the sector, Rolls-Royce has been turning itself around in an impressive way. The share price has been responding well with some big gains from the stock’s lows.
However, City analysts think there’s more to come from the turnaround. And some even see the shares eventually getting as high as about 600p.
But there’s still risk as with all businesses and shares. And it’s possible the stock could decline if things don’t go as well as expected with the ongoing turnaround in the business.
Nevertheless, things are going well at Rolls-Royce right now. And even at the current share price near 220p, I think long-term-focused investors with Hargreaves Lansdown have found a good balance of risk versus potential reward with the stock.
It’s cheap, but is it good value?
The second most popular stock with more buys than sells is financial services provider Legal & General (LSE: LGEN).
My guess is investors piling into the shares are going for the huge dividend yield and making a calculation based mainly on the apparent cheapness of the valuation.
And that’s not a bad strategy because the dividend record since 2017 has been good.
However, there are risks because the financial sector is known for its cyclicality. And we can see that in Legal & General’s volatile record on earnings. Also, with the share price near 217p, the stock has been in a clear down-trend for almost two years.
On balance, I’d be less inclined to follow investors into Legal & General right now than I would into Rolls-Royce.
Looking beyond macroeconomic weakness
The third most popular stock has been the Switzerland-based producer and marketer of natural resources Glencore.
With the stock near 435p, there’s a big dividend yield and a low-looking valuation.
But again, the company operates in a cyclical sector and timing an investment is difficult.
The cyclical risks put me off the stock for the time being. But I can see why investors are looking beyond recession worries to a potentially bullish period in the markets beyond.
Overall, I’d dig in with much more research before considering any of these stocks for a long-term holding period.
