Are Tesla Inc, Apple Inc., & Amazon.com Inc as good as UK investors think they are?

Harvey Jones questions whether British investors are wise to be pouring money into Tesla Motors Inc (NASDAQ: TSLA.US), Apple Inc. (NASDAQ: AAPL.US) and Amazon.com Inc (NASDAQ: AMZN.US).

| More on:

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.

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More.

While most UK investors stick to London-listed stocks, some big global names are too tempting to resist. The following are the three most popular international stocks for UK investors, according to new research from Interactive Investor. But are investors in danger of buying the name, rather than the investment case?

Electric investment

The most traded international stock may surprise some: $40bn tech innovator Tesla Motors (NASDAQ: TSLA.US). Founder Elon Musk, an entrepreneurial designer, engineer and inventor, wants nothing less than to save the world through the power of electric vehicles and solar technology. But is he aiming too high?

Investors were sceptical about the recent merger between Tesla and another Musk project, struggling solar energy firm SolarCity, but fell silent when Tesla unexpectedly posted what was only its second-ever quarterly profit in October. The world is now waiting to see if the new Model 3 Sedan will drive it into the mass market. Investors remain wowed, with the share price up more than 50% over the past year to $250, which leaves it trading at a whopping 137 times earnings. That’s a bit beyond my pocket (like its cars). Tesla thrills, but could also suffer spills. 

Take a bite

The second most popular global stock is no surprise at all: $677bn behemoth Apple Inc (NASDAQ: AAPL.US). Yet it has just been overtaken by Google as the world’s most valuable brand, in the latest Brand Finance Global 500 report. Apple’s brand value has fallen 27% to $107.1bn, due to rising smartphone competition from the likes of Samsung and Huawei, and falling customer goodwill. So has it lost its shine?

A few years ago people couldn’t resist waving their fancy iPhones in my face, yet I still haven’t seen an Apple Watch in the flesh. The company has lost its flash of innovatory genius and I suspect the Western world has hit peak gadget. Sensible people want their lives back.

That said, last week’s Q1 results showed Apple selling more iPhones than ever before, and setting all-time revenue records for iPhone, Services, Mac and Apple Watch. The App Store is doing record business as the company wisely shifts focus from products to services. The stock is up 37% a year to $129. The dividend is higher than 1.77%. Apple still looks worth a bite, especially at 15 times earnings.

In the zone

You need no introduction to $385bn online retailer Amazon.com (NASDAQ: AMZN.US). In fact, you’re probably still paying off the Christmas shopping bill you ran up at Amazon. The Brand Finance Global 500 has just named it one of the companies with the highest rising brand value, up 53%.

It continues to grow strongly while revolutionising the retail market in the US, UK and beyond, and continuing to take market share. It suffered a rare setback in the Q4 with revenues of $43.74bn falling short of the estimated $44.68bn. Even a small slip-up can hit investor confidence when the stock trades at 171 times earnings.

So how much further can Amazon go? The success of Prime and the deep pockets that will allow it to break new markets suggests there’s more to come. Jeff Bezos’s company has justified its sky-high valuation before, and almost certainly will do again.

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.

Harvey Jones has no position in any shares mentioned. The Motley Fool UK owns shares of and has recommended Amazon, Apple, and Tesla. The Motley Fool has the following options: long January 2018 $90 calls on Apple and short January 2018 $95 calls on Apple. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors.

More on Investing Articles

Ice cube tray filled with ice cubes and three loose ice cubes against dark wood.
Investing Articles

Just released: our 3 top income-focused stocks to buy before April [PREMIUM PICKS]

Our goal here is to highlight some of our past recommendations that we think are of particular interest today, due…

Read more »

Investing Articles

Is this the best chance to buy cheap FTSE 100 shares in a generation?

I want to buy shares when they're cheap, and sell... never, just keep taking the dividends. And the FTSE 100…

Read more »

Man putting his card into an ATM machine while his son sits in a stroller beside him.
Investing Articles

Could NatWest shares be 2024’s number one buy for passive income?

For those of us looking to earn some long-term passive income, how does NatWest's 7% dividend yield sound? It sounds…

Read more »

Investing Articles

£12K in savings? Here’s how I could turn that into £13K annual passive income

This Fool explains how investing a lump sum can help her build a passive income stream to enjoy in her…

Read more »

Aerial shot showing an aircraft shadow flying over an idyllic beach
Investing Articles

Here’s why Rolls-Royce shares are now set to fly over the £4 mark

Once again, Rolls-Royce shares are crushing the FTSE 100. Should I add to my holding of this stock at the…

Read more »

Investing Articles

1 under the radar FTSE 100 AI stock investors should consider buying

Our writer explains why this FTSE 100 pick could be a shrewd investment with its established experience of using AI…

Read more »

Investing Articles

Does the beaten-down Diageo share price make it a no-brainer buy?

Harvey Jones spent years waiting for the Diageo share price to look like good value, before finally buying it in…

Read more »

One English pound placed on a graph to represent an economic down turn
Investing Articles

8%+ yields! Should I buy these FTSE 100 income shares this month?

Christopher Ruane weighs some pros and cons of two FTSE 100 shares, both of which have a dividend yield over…

Read more »