The Scottish Mortgage Investment Trust (LSE:SMT) is a listed stock that’s actually a collection of other stocks the management team decides to invest in. So movements in the Scottish Mortgage share price are driven by the collective changes in the prices of all of the stocks it holds. With that in mind, here are a few stocks the company owns that I think could help to push it higher.
A pandemic star with upside
The latest factsheet I have is the one dated 30 April. Therefore, the fund may have made some changes during May that I’m not aware of. However, going by the latest holdings I know of, there are some big positions that could impact the Scottish Mortgage share price.
First up is Moderna, in which the fund has 6.5% of its total assets invested. The Moderna share price is down 33% over the past year. This is one factor why the Scottish Mortgage share price is also down 35%.
I think investors are selling Moderna stock because they believe demand for its Covid-19 vaccine will fall. Although I agree in part, I still think the company will enjoy healthy demand going forward. If we see new variants, or a need for an additional booster in years to come, Moderna is best placed to act.
Further, the fact that Moderna was in a position to quickly make a vaccine shows the type of company it is. If we need a vaccine for problems like Monkeypox or any virus we don’t yet know about, I’d be confident that Moderna might be on the case.
Big tech that’s been oversold
Another large holding that could help the share price is Amazon. It’s one of the top 10 holdings, but has fallen by 24% over the past year.
Results for Q1 missed expectations, with higher costs due to inflation. However, I see the company as a cash cow. It recorded net sales of a whopping $116.4bn for the quarter. Amazon is still a global business with a strong hold on many markets in which it operates. Granted, the share price has moved lower to reflect future growth expectations. But I think the bar is now set at too low a level, one that I think Amazon can beat.
The final company I’m positive on that’s in the portfolio is Tencent. A big risk here that I’m aware of is the influence that the Chinese government can have on operations. Yet I see a company operating in key markets that should offer strong growth in years to come. This includes the Chinese domestic gaming business and the cloud segment.
Upside for the share price
I think that three of the largest holdings in the business are good value right now. As a result, I feel the Scottish Mortgage price could rally as these companies’ share prices start to bounce back. I’m considering buying shares in Scottish Mortgage in order to get exposure to the foreign listed stocks mentioned.
