Portfolio manager Nick Train is often referred to as Britain’s Warren Buffett. Why? Two reasons. First, his approach to investing is very similar to that of Buffett’s, as he looks for high-quality companies that have strong economic moats and invests for the long term. Second, like Buffett, his performance track record is absolutely fantastic – his global equity fund is up almost 170% in the last five years alone.
Interested to learn what stocks Train has been buying recently? Here’s a look at two FTSE 100 stocks he’s snapped up in the last few months.
Online stockbroker Hargreaves Lansdown (LSE: HL) is one FTSE 100 stock that Train has bought recently. He already had quite a large position in HL as it was one of the top 10 holdings in his UK equity fund, yet in February the portfolio manager invested another £375m in the stock while it was trading around the 1,600p to 1,700p mark to nearly double his stake. This was a great move by the portfolio manager as the shares have rebounded over 30% since their late January low, so Train will be sitting on a nice gain already.
Is it too late to buy HL shares now? Personally, I would wait for another pullback. I’m a huge fan of Hargreaves and I actually picked up a substantial parcel of shares for my own portfolio in February around the 1,750p mark. However, with the shares back up near 2,200p, I wouldn’t add to my holding right now as the P/E ratio has climbed back up to around 40. I think with a bit of patience, it will probably be possible to pick up HL shares at a lower price in the months ahead. Often, the best time to pick up financial services stocks is when equity markets are wobbling, so that’s when I’ll be looking to boost my holding in Hargreaves.
Another recent purchase for Train is asset management group Schroders (LSE: SDRC) which is the fourth-largest UK company of its type with assets under management of £410bn. Like Hargreaves Lansdown, Schroders was already a major holding for the portfolio manager, but he has taken advantage of recent share price weakness to up his holding and now holds 10% of the company.
This buy is another great move by Train, in my view. Schroders has an excellent reputation within the investment management industry and the company should benefit as stock markets rise over time. Its recently-announced joint venture with Lloyds Bank, Schroders Personal Wealth, which will be rolled out in June also looks to be a growth driver, as today’s complex financial environment is creating a strong demand for expert wealth management solutions.
While Schroders shares have bounced nearly 30% this year after a Q4 sell-off, I think the stock still offers plenty of value right now, as the valuation doesn’t look stretched. I particularly like the non-voting shares which offer a yield of nearly 5% at present and trade on a P/E of less than 12.
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Edward Sheldon owns shares in Hargreaves Lansdown, Schroders, and Lloyds Banking Group. The Motley Fool UK has recommended Hargreaves Lansdown, Lloyds Banking Group, and Schroders (Non-Voting). 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.