Hargreaves Lansdown investors have been buying Vodafone shares and Nvidia stock

Vodafone shares were the most bought among Hargreaves Lansdown investors last week, closely followed by Nvidia. Dr James Fox explores why.

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Image source: Hargreaves Lansdown plc

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Vodafone (LSE:VOD) shares accounted for 1.66% of all shares bought on the Hargreaves Lansdown platform last week (WC 20 November). In second spot was Nvidia (NASDAQ:NVDA) at 1.44%. Let’s take a closer look at why.

Top of the stocks

Every week, Hargreaves Lansdown tells us which stocks investors bought and sold the most of in the prior week. Here’s the data from that week.

Number of deals – most bought sharesPercentage of total deals placed on platform
Vodafone1.66%
Nvidia1.44%
Microsoft1.41%
Rolls-Royce1.26%
BP1.1%
Number of deals – most sold sharesPercentage of total deals placed on platform
Rolls-Royce1.44%
Lloyds1.12%
Scottish Mortgage1.11%
Tesla1.04%
IAG0.93%

Why Vodafone?

Vodafone shares actually fell 4% last week, and this appears to have been prompted by a report that the board was looking at the possible sale of its Italian operations to Fastweb.

Should you invest £1,000 in Vodafone right now?

When investing expert Mark Rogers has a stock tip, it can pay to listen. After all, the flagship Motley Fool Share Advisor newsletter he has run for nearly a decade has provided thousands of paying members with top stock recommendations from the UK and US markets. And right now, Mark thinks there are 6 standout stocks that investors should consider buying. Want to see if Vodafone made the list?

See the 6 stocks

I can only assume that the falling share price was a result of an institutional investor sell-off. And the reason so many retail investors bought the stock via Hargreaves Lansdown was because they saw a buying opportunity amid the dip.

Vodafone rejected an €11.25bn bid for its Italian unit from an Iliad-backed consortium in 2022. The telecoms giant said the offer wasn’t in shareholders’ best interests. Revisiting a sale may have worried some institutional investors.

Vodafone is an interesting stock pick. It trades at 2 times earnings on an adjusted basis, but that’s warped by two major business unit sales. On a non-adjusted basis, it trades around 7.5 times earnings and 10.7 times on a forward basis.

It also currently offers an 11.1% dividend yield that looks unsustainable given the earnings forecast, which although strong, may fail to cover dividend payments going forward with more business segment sales.

Why Nvidia?

Nvidia’s Q3 results announcement on 22 November was the most highly anticipated moment of earnings season. And it didn’t disappoint.

Nvidia absolutely smashed expectations with adjusted earnings of $4.02 per share, versus consensus $3.37 per share.

The tech giant has seen a 206% increase in revenue over 12 months and its been driven by demand for its GPUs (graphics processing units), which are central to the AI-revolution.

This part of the business alone — it’s data centre unit — delivered $14.51bn in revenue. While the share price was largely unchanged, it clearly attracted the attention of Hargreaves Lansdown investors.

Nvidia is certainly enticing. It’s got momentum and it’s dominating the sector.

However, it trades with a PEG ratio — price/earnings-to-growth — of 1.01. A PEG ratio of one tends to suggest that a stock is trading near fair value, while a ratio below one suggests a company could be undervalued.

The thing is, analysts are changing their forecasts all the time for Nvidia’s earnings. Last week, its PEG ratio was 1.38, suggesting it was overpriced.

Should you invest £1,000 in Vodafone right now?

When investing expert Mark Rogers has a stock tip, it can pay to listen. After all, the flagship Motley Fool Share Advisor newsletter he has run for nearly a decade has provided thousands of paying members with top stock recommendations from the UK and US markets.

And right now, Mark thinks there are 6 standout stocks that investors should consider buying. Want to see if Vodafone made the list?

See the 6 stocks

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.

James Fox has positions in Lloyds Banking Group Plc and Scottish Mortgage Investment Trust Plc. The Motley Fool UK has recommended Lloyds Banking Group Plc, Microsoft, Nvidia, Tesla, and Vodafone Group Public. 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.

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