The FTSE 100 is on fire! 2 top shares I’d still snap up

FTSE 100 shares as a whole might be setting records on a daily basis this month, but that doesn’t mean there aren’t individual opportunities.

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The FTSE 100 index hit a record 8,433 last week and has now notched up 11 all-time highs over the last month.

It’s now got seven trading days to match and beat a record set in 1984 of 12 all-time highs within a rolling four-week period!

Whatever happens next though, I’d buy these two FTSE 100 shares with spare cash and hold them for the long haul.

HSBC

One stock I’ve been buying since early 2024 is HSBC Holdings (LSE: HSBA). I wasn’t expecting it to hit a five-year high so quickly, but I’ll take that. It’s up 20% in just over two months!

However, despite this impressive showing, I still think it offers fantastic value.

For starters, there’s a 7% dividend that appears well-covered by forecast earnings. That’s comfortably above both the FTSE 100 average and the bank’s international peers. It also announced a new $3bn share buyback.

Second, the stock is trading on a price-to-earnings (P/E) ratio of around 7.5. Again, that compares favourably with the index and global peers.

Lastly, the company is aiming to become the leading wealth manager across Asia. I’m very bullish on China and India long term. These are gigantic economies minting millionaires at a rapid clip, which should create plentiful opportunities for HSBC.

Of course, China doesn’t come without risk. Regulatory changes could impact the bank’s operations while the ongoing property market crisis could see loan defaults increase. A sluggish Chinese economy isn’t ideal for HSBC.

Still, I reckon the 7% yield and cheap value, coupled with the attractive long-term growth prospects, make this is a top stock. I’m going to buy more shares for my ISA in the coming weeks.

Scottish Mortgage

My second choice is Scottish Mortgage Investment Trust (LSE: SMT). The company aims to identify and back the world’s greatest growth stocks.

It has a tremendous track record of doing just this. To take one example, it first invested in Amazon nearly 20 years ago.

And despite performing poorly over the past three years, Scottish Mortgage shares have generated a total return of around 400% over the last decade.

There are two big reasons why I like the stock right now.

First, Scottish Mortgage continues to buy back a lot of its own shares. On 8 May, it scooped up 35m shares at £8.95 each. This giant transaction cost £311m.

However, it isn’t done just yet. The purpose of the buybacks is to try and narrow the trust’s discount to its net asset value. This appears to be working because the discount has narrowed significantly, from 15% at the time of the buyback announcement in March to just 5.5% today.

The trust will keep buying to try and eliminate it altogether, which is positive for shareholders.

Also, I like the recent portfolio additions: Meta Platforms and chip foundry Taiwan Semiconductor Manufacturing Company. Both firms are incredibly profitable with huge competitive advantages, and they were bought at attractive valuations (around 20 times earnings).

Admittedly, the portfolio is heavily tech-oriented, so a sell-off in that sector could cause some volatility.

But we’re living in the digital age, and its progress is accelerating, particularly in artificial intelligence. In my view, this FTSE 100 stock remains a brilliant way to invest in this change.

Should you invest, the value of your investment may rise or fall and your capital is at risk. Before investing, your individual circumstances should be assessed. Consider taking independent financial advice.

John Mackey, former CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. HSBC Holdings is an advertising partner of The Ascent, a Motley Fool company. Randi Zuckerberg, a former director of market development and spokeswoman for Facebook and sister to Meta Platforms CEO Mark Zuckerberg, is a member of The Motley Fool's board of directors. Ben McPoland has positions in HSBC Holdings, Scottish Mortgage Investment Trust Plc, and Taiwan Semiconductor Manufacturing. The Motley Fool UK has recommended Amazon, HSBC Holdings, Meta Platforms, and Taiwan Semiconductor Manufacturing. 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.

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