Looking at what other investors are doing can be a good way to generate investment ideas. With that in mind, I’m going to highlight the five most bought stocks on Hargreaves Lansdown’s investment platform last week. Should you buy these shares for your own portfolio?
Believe it or not, the most bought stock on Hargreaves Lansdown was actually a US stock – Tesla. There was a fair bit of excitement around Tesla last week as the company held its long-awaited ‘Battery Day’ (which turned out to be a bit underwhelming).
Should you follow the herd and pile into Tesla shares? I personally think that would be a risky move. Over the last year, its shares have risen about 740%. As a result, it now has a market-cap of $380bn. That means it’s nearly four times the size of Royal Dutch Shell.
At that valuation, the company is priced as if it’s going to completely dominate the electric vehicle industry. I can’t see that happening. I think the valuation looks stretched. So, I wouldn’t buy the shares today.
The second most bought stock last week was British Airways owner International Consolidated Airlines (IAG). It seems the share price fall here continues to attract value hunters.
I wouldn’t buy IAG shares right now. One reason is that airlines face an awful lot of uncertainty at present due to Covid-19. There’s no guarantee they’ll survive in their current form. Another reason is that hedge funds are shorting the stock. I steer clear of any stock that is being heavily shorted.
In third place was Greatland Gold. This is a gold mining company that has assets in Australia. The stock has performed very well this year, rising from 1.8p to 19.2p. It’s pulled back recently however.
Having been burnt badly by small-cap gold mining stocks in the past, I now steer clear of this sector. There’s money to be made in gold stocks, but the risks are high. I’d leave GGP shares alone, personally.
The fourth most bought stock on Hargreaves Lansdown last week was good old Lloyds Bank. This is another stock that’s been beaten up badly this year. Year to date, Lloyds’ share price is down nearly 60%.
Under 30p, I think Lloyds shares are an interesting contrarian play. I don’t expect the shares to recover quickly. Banks face a lot of challenges right now. Economic conditions (bad debt) and low interest rates (there’s talk of negative rates in the UK) are two such challenges.
From a long-term investment point of view however, the stock could have upside potential. There are plenty of stocks I’d before Lloyds though.
[email protected] Capital
Finally, small-cap [email protected] Capital made the top five. This is a financial technology (FinTech) business specialising in inventory monetisation. Last week, it announced it has entered into a strategic investment with a leading European Alternative Investment firm. Also last week, CEO Alessandro bought a ton of call options on the stock. You buy call options when you expect a stock to rise.
I’ve covered [email protected] Capital shares a few times recently. I think the company looks interesting. That said, it’s very much a speculative play. All things considered, I think there are better stocks to buy right now.
Edward Sheldon owns shares in Hargreaves Lansdown and Lloyds Bank. The Motley Fool UK owns shares of and has recommended Tesla. The Motley Fool UK has recommended Hargreaves Lansdown and 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.