Scottish Mortgage Investment Trust (LSE:SMT) stock was one of the most traded stocks. Hargreaves Lansdowne Investor last week.
In fact, 0.98% of all stock purchases on the platform were Scottish mortgages. Here he is 5th on the leaderboard. Trusts, on the other hand, accounted for 0.99% of equity sales.
In monetary terms, it’s clear that the size of these stock deals was smaller than average. Purchases of Scottish mortgages accounted for his 0.74% of total purchase transactions by Hargreaves clients.
Meanwhile, the shares sold accounted for 0.82% of total sales on the platform.
In short, Scottish mortgages are trading well and some investors appear unsure of the trust’s ability to deliver going forward.
However, I recently purchased stock in a Scottish Mortgage for my ISA after holding out for a while. So why do you think now is the time to buy?
evaluation
As a mutual fund, Scottish Mortgage invests in dozens of different companies. While I tend to focus on value stocks, the Trust is more focused on growth and technology stocks, many of which are listed in the US and China.
The Trust’s five largest holdings are: modern, Illumina, ASML holding, Tesla When Free MarketOverall, these stocks make up about a quarter of the portfolio.
Most growth stocks, including the above, have seen their stock prices plummet over the past 18 months. And, of course, that’s reflected in Scottish Mortgage’s share price.
This alone is not a good reason to invest. There’s a reason stocks are cheap. But there is certainly consensus that the valuation is much more attractive than before the adjustment. And this is the starting point for my Scottish Mortgage investment.
Similarly, it is worth noting that Scottish mortgages are currently trading at a 9% discount to net asset value (NAV). Calculating NAV can be difficult, especially if the trust owns unlisted shares. But broadly speaking, this should be seen as a plus.
solid track record
Scottish Mortgage is known for picking the next big winner. It acquired the company we now consider a household name before most people even heard its name.
This is reflected in the fact that the stock has risen 66% over five years, despite falling 37% over the past 12 months.
It’s not just a “growth stock”. arc innovation2020’s “Best Investor” Kathy Wood’s flagship portfolio is down 11% in five years (down 55% in 12 months).
Mortgages in Scotland are clearly well managed. And despite the retirement of co-manager James Anderson, I don’t think that will change.
why now?
The macroeconomic environment, characterized by rising interest rates and slowing growth, is not favorable for the stocks Scottish Mortgage invests in.
But as an investor, I look at least 6-12 months ahead. And towards the end of the year, I think the macroeconomic environment is improving.
We also hope that China’s reopening will give confidence a boost after the current wave of the virus has passed. Chinese stocks have been depressed for some time, largely due to Covid restrictions.stocks like Nio — shared by The Trust — likely to benefit from easing this year.
After Scottish mortgage stocks sold short? I will buy it for the first time in a while! It first appeared on The Motley Fool UK.
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James Fox holds positions at Hargreaves Lansdown Plc, Nio and Scottish Mortgage Invest Trust. The Motley Fool UK recommends ASML, Hargreaves Lansdown Plc, MercadoLibre and Tesla. The views expressed about the companies mentioned in this article are those of the author and may differ from official recommendations on subscription services such as Share Advisor, Hidden Winners and Pro. At The Motley Fool, we believe that considering diverse insights makes us better investors.
Motley Fool UK 2023