UK stocks have been out of fashion for a while. The FTSE 100 hasn’t grown as fast as other markets in recent years amid Brexit related concerns. The benchmark index hasn’t performed well this year either as inflation, higher interest rates and negative economic forecasts weigh on the stock market.
Despite falling, the FTSE 100 has actually outperformed the Nasdaq and other markets in 2022. This is partially because the UK’s led index contains many booming mining and hydrocarbon stocks.
However, amid general downward pressure on UK stocks, I’m looking for bargains and the FTSE is a great place to look. Here are four stocks I’ve either bought or looking to add to my portfolio.
Should you invest £1,000 in Rolls-Royce right now?
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Hargreaves Lansdown
Hargreaves Lansdown shares have collapsed since the financial services company reported a slowdown in business. The firm is down 52% over the past year.
Yet I think there are some pretty positive trends for the firm. One in 10 Britons started trading during the pandemic, and many of them used the Hargreaves Lansdown investment platform.
However, trading has fallen since the pandemic and this is why the business is down. But in the long run, I think Hargreaves will benefit as more and more individuals take charge of their own investments.
The cost of living crisis might slow personal investment in the near term but, in the long run, I’m confident on this firm’s capacity to grow.
Unilever
Inflation will be putting pressure on fasting-moving consumer goods companies. And, despite its size, this group has also been going through a prolonged period of underperformance.
However, I think there are several reasons to be positive on Unilever. Firstly, The firm posted its “fastest underlying sales growth for nine years” in February’s full-year report. It said sales grew by 4.5% compared to the previous year.
Unilever also earns a significant proportion of its income from overseas markets. In theory, with a weakened pound, the company’s earnings should be somewhat inflated.
Rolls-Royce
Rolls-Royce stock is trading for a fraction of its pre-pandemic price. However, I think things are looking up for this engineering giant.
In fact, Morgan Stanley recently said it was the “the clearest example of mispricing” in its coverage. The bank suggested there are clear signs that the aviation industry is finally near its pre-pandemic levels.
Moreover, Rolls-Royce defence business appears to be doing well on the back of simmering geopolitical tensions and conflict in Europe.
Debt is one issue, but the firm is selling business units to raise capital.
Scottish Mortgage Investment Trust
Scottish Mortgage Investment Trust was among the best performing UK funds in recent years, until the tech sell-off.
The fund has an impressive record of picking the next big winners. Two of its biggest holdings are Moderna and Tesla. The fund bought in early and made a fortune on both of them.
Down some 45% over the past year, I finally see now as a good opportunity to buy in. The current environment isn’t going to be kind to the growth and tech stocks it holds but, in the long run, I expect this fund to do well.
