[date-today format='F j, Y']

Investors are going all-out on these FTSE 100 stocks! Should I buy too?

Investors are aggressively buying these FTSE 100 stocks in 2022, but are they good long-term investments? Zaven Boyrazian investigates. The post Investors are going all-out on...
blue and white floral textile
Photo by Uriel SC

FTSE 100 stocks are a popular destination for many UK investors. After all, these established businesses often act as a safe haven against the fluctuating volatility of the markets, which seems particularly elevated recently.

In the last week, shares of Lloyds Banking Group (LSE:LLOY) and Glencore (LSE:GLEN) are the two most bought stocks, according to Hargreaves Lansdown. Why are they suddenly so popular? And should I be considering them for my portfolio as well?

The most popular of the FTSE 100 stocks is Lloyds

The sudden surge in popularity surrounding Lloyds shares isn’t much of a mystery. For years, it and other banks have struggled to generate a sizeable profit margin on lending activities. Why? Because interest rates have been so low. Now with inflation on the rise, the Bank of England has announced plans to push rates back up.

This may be horrible news for consumers, but it’s a dream come true for Lloyds. With profits expected to rise considerably and pandemic-related loan impairments seemingly a thing of the past, I’m not surprised that it’s one of the most popular FTSE 100 stocks to buy right now.

But even though the shares are up over 30% in the last 12 months, the group still has its risks. If Covid-19 decides to mutate again and restrictions are reintroduced, then these gains could just as quickly disappear. But this is ultimately a short-term issue. And with tailwinds on the horizon, I’m considering adding this stock to my personal portfolio.

Demand for metals is surging

Following on with the theme of inflation, I’m also not surprised to see Glencore take second place in the popularity contest. Mining is a primarily fixed-cost operation. So, when raw materials like metals start to increase in price, these gains translate almost entirely into profit for mining businesses.

Rising prices are further amplified by surging demand from the automotive sector, especially for renewable energy metals like cobalt, copper, and nickel. And Glencore mines all three.

Looking at its latest results, revenues jumped 43% in 2021, and underlying profits by 228%! Needless to say, as FTSE 100 stocks go, that’s an exceptional level of growth. And based on analyst forecasts, it’s expected to continue well into 2022.

While that certainly explains the sudden surge in popularity, there are some risks to consider. First and foremost, the surging commodity prices haven’t gone unnoticed by the competition. Investments in the discovery and development of new mining sites are on the rise as companies seek to capitalise on the favourable environment. Eventually, the supply will meet the demand. And when that happens, prices will naturally start to decline.

That will obviously be bad news for Glencore and its share price. However, I’m still tempted to add this business to my portfolio. Why? Because demand for battery metals isn’t exactly going to disappear any time soon, especially with the Western world beginning its transition to electric vehicles and renewable energy technologies.

The post Investors are going all-out on these FTSE 100 stocks! Should I buy too? appeared first on The Motley Fool UK.

But popularity aside, there is another FTSE 100 stock to have caught my attention this week. And it looks even better than both of these combined…

FREE REPORT: Why this £5 stock could be set to surge

Are you on the lookout for UK growth stocks?

If so, get this FREE no-strings report now.

While it’s available: you’ll discover what we think is a top growth stock for the decade ahead.

And the performance of this company really is stunning.

In 2019, it returned £150million to shareholders through buybacks and dividends.

We believe its financial position is about as solid as anything we’ve seen.

Since 2016, annual revenues increased 31%
In March 2020, one of its senior directors LOADED UP on 25,000 shares – a position worth £90,259
Operating cash flow is up 47%. (Even its operating margins are rising every year!)

Quite simply, we believe it’s a fantastic Foolish growth pick.

What’s more, it deserves your attention today.

So please don’t wait another moment.

Get the full details on this £5 stock now – while your report is free.

More reading

2 FTSE 100 dividend stocks I’d buy in a Stocks and Shares ISA for passive income
6% dividend yield! 2 UK shares I’d buy in February and hold for 10 years
The Lloyds share price is up 6% in 2022. Buy now while it’s cheap?
Will the Lloyds share price double in 24 months?
3 FTSE 100 stocks I’d avoid like the plague!

Zaven Boyrazian 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.





© 2022 The Daily Encrypt. All Rights Reserved. This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.

Latest News