Taking a look at the data relating to the most frequently traded shares through Hargreaves Lansdown makes for a fascinating read. As well as allowing private investors to see which companies are in favour, it can be a useful source in generating investment ideas.
Today, I’m going to consider two stocks on the list and take a closer look at whether they’re among the best UK shares to buy now.
The most traded FTSE 100 stock through HL
Topping the chart at the time of writing is the renowned Scottish Mortgage Investment Trust (LSE: SMT). In my view, it’s not difficult to see why.
Since the beginning of the year, the SMT share price has risen 52%, which is an outstanding performance for an investment trust. In fact, over the last five years, the trust has added 260% to its value.
The driving force behind SMT’s exceptional growth is its significant exposure to top US stocks including Tesla, Amazon, Spotify and Netflix. On top of this, the trust has substantial exposure to the Chinese tech titans Tencent and Alibaba, which have both performed strongly in recent years.
Ultimately, SMT’s well-diversified portfolio makes for an attractive blend of companies geared towards achieving global growth. Furthermore, last week’s slide in tech stocks saw the trust shed 12% from its value, which explains why investors are flocking in large numbers to buy shares at a discounted price, and I don’t blame them.
In my view, the UK investment trust is unrivalled in terms of its outstanding long-term track record and growth, which leads me to believe it’s one of the best stocks on the market to buy now.
Lloyds Banking Group: one of the best UK shares to buy?
Further down the list, the next most-bought UK stock by Hargreaves Lansdown investors is Lloyds (LSE: LLOY), despite its poor share price performance over recent years.
Since the start of 2020, the shares are down by 58%. After taking a big hit in the March sell-off, they currently trade at around 26.7p. That gives Lloyds a price-to-earnings ratio of 7.7.
Towards the end of July, the bank reported a 16% decline in first-half net income, resulting in an overall loss before tax of £602m. That’s pretty bleak considering the group made a profit of £2.9bn in 2019.
However, Lloyds’ balance sheet remains in relatively good shape, largely as a result of the cancellation of the final dividend payment. Additionally, operating costs have fallen again, and the group has continued to grow its wealth and insurance division, which could prove increasingly important in the long run.
Despite being confident that Lloyds has what it takes to whether the storm, I don’t believe the shares are among the best to buy at the moment. I’d rather put cash in a high-quality business that’s well-positioned to achieve serious long-term growth.
Matthew Dumigan has no position in any of the shares mentioned. The Motley Fool UK has recommended Lloyds Banking Group. 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.