The BT (LSE: BT-A) share price fell 5% this week as the release of its latest results saw shareholders hurry to offload their shares.

The FTSE 100 stalwart has struggled in recent years. And with the stock down 19% across the last 12 months, this epitomises the gloomy period that its shareholders have had to suffer. Five years ago, a share in the telecommunications giant would have cost me just shy of 210p. Today a share costs just 145p.

In true Fool fashion, I’m always on the lookout for stocks I can snap up for cheap and hold for years to come. So, could BT be my next target? Let’s explore.

BT update

The main reason for the tumble in the BT share price this week was the release of its full-year results. For the 12 months to 31 March, BT posted revenue of £20.7bn, beating expectations of £20.5bn, while adjusted EBITDA rose by 5% to £7.9bn. Yet despite this, its free cash flow had fallen 5%, to £1.3bn. Pre-tax profits also nosedived 12%.

However, the headline that largely caught investors’ attention was the major job cuts that the business plans to take in the years ahead. By the end of the decade, BT’s workforce will be reduced by over 40%, with this including BT employees and third-party contractors. This move feeds more widely into the firm’s cost-saving initiative, of which it announced it had saved £2.1bn towards a £3bn target.

With the stock falling 8% following the announcement, investors clearly didn’t take kindly to the news.

Should I buy?

Regardless of the news, does this fall present an opportunity for me to snag up some shares?

Well, there are certainly a few reasons why I like the look of BT. To start, the stock offers a substantial dividend yield of around 5.6%. With inflation set to continue to persist in the UK in the months to come, this offers me a hedge against high rates, to a degree.

The stock also looks relatively cheap, with a price-to-earnings (P/E) ratio just shy of eight.

However, I do have some major concerns with BT. The business finds itself sitting on a monumental pile of debt. And to make matters worse, a further £850m was added in the last year following pension scheme contributions. With the pile now sitting at nearly £19bn, this poses a major risk for BT. Further, with interest rates at highs not seen in years, this debt may become difficult to pay off.

BT also faces headwinds such as the impacts of the rising cost of living. Recently it was reported that one million people cancelled their broadband in the last year as inflation continues to squeeze people’s budgets. This drop in demand will likely have an adverse effect on BT in the months ahead.

So, while BT shares look cheap, I won’t be buying any right now. Its low P/E ratio and above-average dividend yield are certainly attractive. However, with issues such as its massive debt and uncertainty surrounding future job slashing, I’m steering clear of BT for now.

The post The BT share price fell 5% this week! Is now my time to buy? appeared first on The Twelfth Magpie.

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Charlie Keough has no position in any of the shares mentioned. The Motley Fool UK has no position in any of the shares mentioned. 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.

The FTSE 100 has had a strong start to the year, up around 5%. And as such, I’m on the lookout for FTSE 100 stocks I can buy this month.

Investors had a tough time in 2022 as the Russia-Ukraine conflict alongside red-hot inflation saw global markets take a hit. Yet despite this, the index flexed its strength, posting a slight gain for the year. In contrast, the S&P 500 saw a 20% fall.

Much of the same is expected in 2023. However, with the FTSE 100 posting a strong start, I have my eye on two stocks that I think would be solid additions to my portfolio. Let’s take a closer look.

Scottish Mortgage Investment Trust

The first on my list is Scottish Mortgage Investment Trust (LSE: SMT). Last year was a bleak time for growth stocks as investors shied away from these riskier investments. As a result, the Scottish Mortgage share price nosedived by 40%.

The trust has also got off to a slow start year to date, with its stock slightly down. However, I like the look of the Baillie Gifford fund as a long-term buy.

To start, as a retail investor, what I most like about Scottish Mortgage is the exposure I gain under one investment. The trust invests in over 100 companies, including unlisted firms, meaning I diversify my portfolio through owning it.

Scottish Mortgage is also currently trading at around a 15% discount to a net asset value of 835p per share, which signals that the fund is undervalued. This suggest that I can access its top holdings such as ASML and Tesla cheaper than their market rate. Clearly, this is a positive.

Despite this, it’s weighting to China has seen it underperform recently as the country has struggled with its ongoing battle with Covid-19. And on top of this, with interest rates set to be hiked further, the trust could take a hit given its focus on growth stocks.

However, with a long-term focus, and with the diversification it offers my portfolio, I like the look of Scottish Mortgage.

Next

Second on my list is retail giant Next (LSE: NXT). Unlike Scottish Mortgage, the stock has got off to a strong start in 2023, rising an impressive 15%.

One reason for this is that in January the business raised its pre-tax profit forecast by £20m to £860m. This was due to a rally in full-price sales in the nine weeks to the end of 2022.

The stock also looks cheap to me. It currently trades on a price-to-earnings ratio of 12. For a business of Next’s quality, I think this presents good value. Recently, it has also looked to expand, with its latest move being the acquisition of fashion company Joules.

The biggest threat for Next in the months ahead is rising costs and the potential for consumers to cut back on spending. However, as a strong brand with plenty of experience in the fashion retail industry, I’d be willing to snap up some Next shares.

The verdict

I don’t have the spare cash to buy these FTSE 100 stocks in March, otherwise, I’d be keen. Should this change in the near future, I’ll be looking to pick up both.

The post 2 cheap FTSE 100 stocks I’d be keen to snap up in March! appeared first on The Twelfth Magpie.

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Charlie Keough has no position in any of the shares mentioned. The Motley Fool UK has recommended ASML and Tesla. 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.

Lloyds (LSE: LLOY) shares have failed to excite in recent times, with the stock down over 20% in the last five years. Racing inflation and falling investor confidence in 2022 saw it continue to suffer as shares in the FTSE 100 bank fell 14%.

Despite this, 2023 has seen Lloyds rally. Up by 12%, a strong start to the year has seen it nearly reverse all its losses from last year.

So, is now the time to be snapping up Lloyds shares? I think so. Here’s why.

Why the rally?

One of the main reasons for the recent spike in the Lloyds share price is rising interest rates. With the Bank of England (BoE) recently hiking rates to 4%, Lloyds has benefited from this.

This is because higher rates allow the business to charge customers more when they borrow, in turn boosting net interest income. For Q3, its underlying net income was up 15%, fuelled by growth in the net interest margin. And with growth projected at 23% in net interest income for its upcoming Q4 results, it’s clear to see why investors have been keen on the stock year to date.

Looking ahead, while many think that interest rates are near their peak, it’s predicted that they could jump a further 25-50 basis points in 2023. With this in mind, the business looks set to continue to benefit in the months ahead.

Not all good news

While Lloyds stock has jumped this year due to the BoE’s attempts to curb inflation, rate hikes are a double-edged sword. Higher interest payments may see customers default on loan payments. Clearly, this is bad news for the bank.

Lloyds is also more susceptible to a weakening UK economy giving its greater domestic focus compared to its competitors. With the UK economy already in trouble, and with 2023 set to be choppy, Lloyds could suffer as a result.

Remaining positive

Despite this, I like the stock due to its dividend yield. Figures released yesterday revealed that inflation had eased for the third month in a row to 10.1%. With a 4% yield, while it’s not inflation-beating, the passive income generated from Lloyds stock offers me a partial hedge. With rates not set to come down to a more respectable level for the foreseeable future, buying Lloyds makes sense.

The stock also has a low valuation. With a price-to-earnings (P/E) ratio of around 8.7, this sits comfortably below the FTSE 100 average of around 14. It also has a forward P/E of just 7.

Should I buy?

I’ve been tracking Lloyds shares for a while. And I recently decided to bite the bullet and add the stock to my portfolio. Its low valuation and high dividend yield make it an attractive proposition. And despite the threat of a weak UK economy, hopefully, the gains seen from high interest rates will allow Lloyds to offset this.

When I last bought Lloyds stock, I thought I had enough exposure. However, with its upward trajectory and at its current price of around 53p, I still think it’s attractive. With this in mind, I’ll be looking to top up my holding in the weeks ahead.

The post Lloyds shares are up over 10% in 2023! Is it time to buy? appeared first on The Twelfth Magpie.

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Charlie Keough has positions in Lloyds Banking Group Plc. The Motley Fool UK has recommended Lloyds Banking Group Plc. 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.

Surging inflation has battered global markets this year. And despite pharmaceutical stocks tending to fare well in times like this, GSK (LSE: GSK) shares are down nearly 12% in 2022.

This fall has caught my eye. I think it presents a great opportunity to snag some cheap shares as we head into 2023 and to hold them for the long term. Here’s why.

GSK share price history

Before we get into it, let’s take a look at how the GSK share price has performed in recent times.

Inflation has peaked above 10% in both the UK and the US this year, meaning markets have taken a beating, including GSK. At this time last year, a share in the business would have set me back £16.24. Today, at the time of writing, it would cost me just £14.32.

Across the past five years, the stock has returned over 8% to shareholders, a significantly better return than that of the FTSE 100.

Is it time to buy?

So, is now the time to buy GSK? I believe so.

Its main attraction for me is the strong results the business has posted recently. For example, in its Q3 update, it announced sales growth of 9% to £7.8bn, fuelled by record sales of its shingles vaccine, Shingrix. On top of this, GSK also managed to reduce its net debt by £3.7bn in Q3 year on year to just over £18bn, while free cash flow came in at £723m.

With the macroeconomic headwinds that we’ve been facing, these are encouraging signs. As a result, GSK raised its full-year forecasts, with sales growth now expected to sit between 8% and 10%.

The business has also made great strides in streamlining its operations, predominantly through the Haleon demerger. The move will allow GSK to focus on developing vaccines and medicines. And with over 60 currently in development, this could boost profits in times ahead.

What also draws me to the stock is its dividend yield. At 7%, this isn’t inflation-beating. However, it does sit comfortably above the average of its FTSE 100 peers. With inflation predicted to persist in 2023, the cash generated from these dividends will come in handy.

The price-to-earnings ratio of around four also signals to me that the stock may be currently undervalued.

GSK concerns

The largest concern I have with GSK is rising inflation. As it continues to persist into 2023, this could see costs spike.

There’s also the persistent issue of potential legal action. The firm recently had a legal ruling thrown out after it was suggested that its Zantac heartburn treatment causes cancer. And while the outcome of this ruling was positive (at least for now), it highlights the potential risks and complications that come with investing in businesses such as GSK.

The verdict

Should I have some spare cash, I’ll be looking to pick up GSK shares as we head into the New Year. The business has posted some strong results during a tough year. And with its meaty dividend yield and low valuation, I like the look of the stock.

The post Why I’d buy GSK shares in 2023 appeared first on The Twelfth Magpie.

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Charlie Keough has no position in any of the shares mentioned. The Motley Fool UK has recommended Gsk Plc and Haleon Plc. 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.

The last month or so has seen Lloyds (LSE: LLOY) shares rally. Up around 9%, this has reversed some of the losses the stock has seen in 2022.

The shares have been hit this year with factors such as red-hot inflation weighing down investor sentiment. However, I think 2023 could be the year to buy. Here’s why.

Lloyds share price history

The last five years have been bleak for shareholders in Lloyds. Within this time, the stock has fallen around 30%, including a 42% fall in 2020 alone.

This year has told a similar tale. With inflation reaching 11.1% for October, investor confidence has plummeted. After falling below the 50p mark back in February, the Lloyds share price has failed to rise above it since. As we head into 2023, Lloyds investors will be hoping for a turnaround in fortunes.

Where next?

So, where does the stock go from here?

Let’s start by getting the potential headwinds out of the way. Firstly, we’re in a recession. And with Lloyds focusing on the domestic market, this makes it more vulnerable to the impacts of a weakening UK economy.

As one of the UK’s largest mortgage lenders, the weak property market will also have an adverse effect on Lloyds. With UK house prices predicted to fall 9% between now and autumn 2024, people may be deterred from buying new homes.

Not all down and out

Despite this, I think there are plenty of reasons to like Lloyds shares.

In the short term, Lloyds is set to benefit from higher interest rates. To curb inflation, the Bank of England has been hiking rates in recent times. Currently, the rate sits at 3%. And with predictions that the base rate could rise above 4% in 2023, this is a positive for Lloyds.

This is because higher rates allow the firm to charge customers more when they borrow from the bank. As a result of this, Lloyds saw its underlying net income up 15% in Q3, driven by growth in its net interest margin.  

What I also like about the stock is its attractive dividend yield. This currently sits at around 4.6%. And while this isn’t inflation-beating, it does trump the FTSE 100 average. With high inflation, the passive income stream created from this investment could come in handy in the months ahead.  

Lloyds also has a low valuation. With a price-to-earnings (P/E) ratio of 7.7, this sits well within the ‘benchmark’ 10 and highlights to me that the stock is undervalued. On top of this, it also has a forward P/E of 6.1.

While the bank could suffer as a result of an underperforming housing market, this could be offset by the moves it’s taken in the private rental market. Through the brand Citra Living, Lloyds plans to buy 50,000 homes by 2030.

Time to buy?

So, are Lloyds shares a buy? I’d say yes.

The stock will face headwinds in the short term. However, I see long-term potential. The rise we’re set to see in interest rates will benefit the firm. And its venture into the rental market looks promising. Its dividend yield and low valuation are a bonus. If I have some spare cash, I intend to buy Lloyds shares as we head into the New Year.

The post Are Lloyds shares a buy for 2023? appeared first on The Twelfth Magpie.

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• Prediction: this UK growth stock will outperform Lloyds shares over the next 5 years
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• Here’s how much I think Lloyds shares will be worth by the end of 2027
• How to target a tax-free passive income of £1,275 a month on top of your State Pension

Charlie Keough has no position in any of the shares mentioned. The Motley Fool UK has recommended Lloyds Banking Group Plc. 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 has been tough to navigate as a retail investor. The Russia-Ukraine conflict along with surging global inflation has seen many parts of the market depressed this year. However, I’m always keen to remain optimistic. Therefore, with 2023 around the corner, I’m on the hunt for some FTSE 100 stocks I can buy in the New Year and hold for the long run. Here are two I have my eye on today.

GSK

The first is pharmaceuticals giant GSK (LSE: GSK). The stock has struggled lately, down nearly 12% year to date.

However, I think the New Year could be a great time to add the stock to my portfolio. Firstly, GSK has posted strong results so far in 2022. In its most recent update, the business announced sales growth of 9%, up to nearly £8bn. And as a result, the firm raised its full-year outlook, with growth in sales now expected to come in between 8% and 10%. This comes on the back of it already raising its guidance in its half-year update, showing that the business is going from strength to strength.

Elsewhere, I also like the moves GSK has made this year to streamline. The most noticeable of these was the demerger of its consumer healthcare business Haleon. The split will allow GSK to reorganise its operations and place greater emphasis on the development of vaccines and medicines. It also managed to siphon off £7bn in debt as part of the move.

What’s also enticing about the stock is the meaty dividend yield it offers. With a yield of around 7%, this offers me some protection against inflation. As we enter 2023, the passive income stream generated from GSK shares seems to be a smart play.

In the short term, the business could face headwinds such as rising costs as inflation continues to rise. However, for a long-term buy, I like the look of GSK.

SMT

The second stock I like the look of is Scottish Mortgage Investment Trust (LSE: SMT). The trust has seen 40% shaved off its value in 2022 as investors have turned their back on growth stocks.

Despite this, I think Scottish Mortgage could be a solid buy at its current price. The diversity it offers my portfolio is attractive. With over 100 companies under its umbrella, including some unlisted businesses, I gain access to a variety of stocks under one investment.

What I also like is Scottish Mortgage’s investment style. By this, I mean that management buys for the long run. The managers measure performance over a more-than-five-year timeframe. And while past performance is no indication of future returns, the last five years have seen SMT return 77% to shareholders. Impressive.

Inflation will continue to weigh the stock down in the short term. And its heavy weighting in China could see it suffer in the months ahead. However, I believe in the long run that this weighting will bear fruit. I’d be happy to buy in the New Year and hold for a decade.

The verdict

Unfortunately, I won’t have the cash to buy both of these next month. I should have enough to buy one for now, so I’ll probably look to pick up GSK first.

The post I’d buy these 2 FTSE 100 stocks in 2023 and hold them for a decade appeared first on The Twelfth Magpie.

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Charlie Keough has no position in any of the shares mentioned. The Motley Fool UK has recommended Gsk Plc and Haleon Plc. 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.

Navigating markets in 2022 has been far from easy. And as a retail investor, the untold amounts that have been wiped off global markets has made it difficult to know where to put my money. However, I’m staying positive. I think the current market presents plenty of opportunities to buy some shares and hold them for the long run. With this, I’m on the lookout for FTSE 100 stocks I can buy this month.

Here are two I’m considering.

BAE Systems

My first choice is the arms and security business BAE Systems (LSE: BA.). The stock has had a prosperous year, rising over 45% year to date. Over the last 12 months, it’s up an impressive 44%.

The main reason for the rise is the war in Ukraine. While the conflict will have a direct influence in generating business for BAE, it’s also driven defence concerns across the globe. With talks of a ‘new Cold War’, BAE has seen a higher demand for its products.  

The first six months of the year saw the firm’s underlying profits rise by 8.2%. However, what was arguably more significant was the order backlog of £52.7bn, an 18% rise from the same period in 2021.

The stock also offers a dividend yield of around 3.1%. While this isn’t FTSE 100 average beating, the business has looked to increase shareholders’ returns this year, including an increased interim dividend and a £1.5bn buyback programme. These are positive signs.

What could see the business struggle in the months ahead is the higher cost of materials as inflation continues to surge.

However, with a positive outlook for 2022 and beyond, BAE Systems shares look like good value to me.

GSK

The second stock I’m looking at is pharmaceutical giant GSK (LSE: GSK). The multinational healthcare business is best known for offering medicines and vaccines. The stock has fallen over 9% this year. In the last 12 months, it’s down 8%.

This week saw the firm release its Q3 results, where it reported continued strong growth. For the period, sales rose 9% to £7.8bn, including impressive 24% growth in its Speciality Medicines.

The business raised its guidance back in July. However, Q3 has seen it push up this guidance again, with it now expecting growth in sales to be between 8% to 10%.

This continuous growth follows the demerger of its consumer healthcare division, Haleon. The move has allowed GSK to streamline its operations and siphon off debt. And with CEO Emma Walmsley describing the move as undoing the “Gordion knot” that has hampered GSK’s balance sheet, the early signs are that the move is working.

What also draws me to GSK, like BAE, is its dividend yield. This currently sits at around 6.4%. With inflation reaching a fresh 40-year high for September, the passive income generated from this seems like a smart move.

GSK will also likely be impacted by higher costs as inflation continues on its charge. Yet despite this, I see long-term potential.

The verdict

I like both of these stocks. However, I won’t have the cash to buy both in November. I should have enough to buy one, so I’ll probably look to pick up GSK.

The post 2 FTSE 100 stocks I’d buy in November appeared first on The Twelfth Magpie.

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Charlie Keough has no position in any of the shares mentioned. The Motley Fool UK has recommended GSK plc and Haleon plc. 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.

The next few weeks are set to see businesses update investors with their latest results. And with the way 2022 has played out, it’s no surprise some firms have been posting sub-par results. With this in mind, I’m keeping an eye on Lloyds (LSE: LLOY) shares.

It’s been a tough year for the business. The grim economic outlook has seen its share price fall by 14% in 2022. Across the last 12 months, it’s down a slightly more respectable 12%.

However, with the stock currently trading for around 43p, I think now would be a good time to add it to my portfolio. Here’s why.

Lloyds profits slide

It hasn’t been the smoothest ride for long-term Lloyds shareholders. And yesterday this continued as the bank announced that its pre-tax profits for Q3 fell by over 25% to £1.5bn.

The fall was largely pinned to provisions for bad debts and loan losses. And with these jumping to £668m, this indicates that Lloyds is protecting itself against customers who may default on payments in the future.

The release saw the Lloyds share price slip in the early hours of the morning. That said, it recovered to finish yesterday slightly up.

Silver lining

The large drop in profits clearly isn’t what Lloyds shareholders wanted to hear. But it’s not all bad news. One major positive was the 13% rise in net income due to rising interest rates. With rates in the UK currently sat at 2.25%, this has allowed the firm to charge customers more when they borrow from the bank. With this, Lloyds was also able to increase its net interest margins.

As inflation continues to soar and show no signs of slowing down as we head into 2023, there have also been predictions that rates could be hiked to as high as 4% in the months and years ahead. Going forward, this will continue to provide a boost for Lloyds.

What I also like about Lloyds is the passive income stream I can create by buying the stock. With a FTSE 100 average-beating 5% dividend yield, the stock seems like a smart play in current times. Its low price-to-earnings ratio of seven is also an attractive factor.

Housing market slowdown

Lloyds also gave a bleak prediction for the future state of the UK housing market. And as of one the largest mortgage lenders, this may spell trouble for the business. It predicted that UK house prices will fall by 8% next year, followed by a long period of stagnation.

However, this could be offset by its new rental venture, Citra Living, and it has predicted that demand is set to increase across the next five years.

Why I’d buy

There’s no doubt in my mind that Lloyds shares will be a slow burner. However, as a Fool, a long-term approach to investing doesn’t faze me. The short term may be volatile for the business as the UK braces itself for a tough year ahead. However, with the bank set to benefit from rising interest rates, along with its substantial dividend yield, I think the stock is a smart buy. While I don’t have any spare cash right now, if I did, I’d happily buy Lloyds shares at their current price.

The post Are Lloyds shares still a buy despite falling profits? appeared first on The Twelfth Magpie.

More reading

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• Prediction: this UK growth stock will outperform Lloyds shares over the next 5 years
• Barclays, NatWest or Lloyds shares: which is the better pick for a UK retirement portfolio?
• Here’s how much I think Lloyds shares will be worth by the end of 2027
• How to target a tax-free passive income of £1,275 a month on top of your State Pension

Charlie Keough 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.

It’s been a tough year for investors in Scottish Mortgage (LSE: SMT). Rising inflation as a result of supply chain issues, alongside the tragic war in Ukraine has seen the investment trust reverse some of the fine form that it’s produced in the past few years. In 2022, the Scottish Mortgage share price is down just shy of 40%. In the last 12 months, the trust has fallen nearly 45%.

It’s clear the next few months may be volatile when it comes to investing in the stock market. However, I think Scottish Mortgage shares, currently trading for well below 800p, could be a smart long-term addition to my portfolio.

The story so far

Scottish Mortgage made a name for itself back in 2020 when it rose an impressive 105% despite Covid-19 running rife on markets. However, since then, the trust’s growth has significantly slowed.

The main reason for its demise year to date is inflation. Rates have been on the rise across the globe. And as a result, markets have seen trillions wiped off their value. Inflation has at times been above 10% in both the US and the UK. And with rates showing no sign of slowing down, this could spell trouble for the Scottish Mortgage share price.

This is because during these volatile periods the worst affected assets are growth stocks, which Scottish Mortgage focuses on holding in its portfolio. Due to the volatility these stocks provide, investors tend to shy away from them during difficult times, instead switching to ‘safer’ alternatives.

Due to this, investors have been selling off their shares in the trust. With its top holdings including names such as Tesla and ASML, which are down 40% and 38% this year, it’s clear to see why Scottish Mortgage has suffered.

Is it time to buy?

Despite this, I think now may be the perfect time for me to buy the stock.

Firstly, the investment style adopted by its management team is one I can relate to. By this, I mean buying for the long hold.

Performance is measured over a five-year+ period, meaning the volatility that can be seen in the markets right now shouldn’t pose a threat. While past returns are not an indication of future performance, the last five years have seen the trust return an impressive 80%.

On top of this, I also like the diversification I get through buying Scottish Mortgage shares. As a retail investor, I get access to over 100 companies all through a single investment. For me, this is perfect.

One issue is its weighting to China. With some cracks beginning to appear in the country’s economy, this could leave the trust exposed. On top of this, as inflation rises in the months ahead, the trust may also see its price take a hit.

With this said, I’d happily open a small position in Scottish Mortgage today. Its focus on growth stocks combined with its long-term approach leads me to think I could see some healthy returns in the years ahead. I also think its weighting in China will bear fruit in the long run.

The post The Scottish Mortgage share price is below 800p! Is it time to buy? appeared first on The Twelfth Magpie.

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Charlie Keough has no position in any of the shares mentioned. The Motley Fool UK has recommended ASML Holding. 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.

Lloyds (LSE: LLOY) shares have plummeted this week. With the stock down around 17% in 2022, it has fallen by 9% in the last five days alone.

The business has been a victim of the large drop we’ve seen in global markets in the last few days as a piling up of pressures continues to worsen the economic outlook.

However, I’d rush to add the FTSE 100 bank, currently trading for 41p, to my portfolio. Here’s why.

The story so far

Clearly, it’s been a tough year for Lloyds. Inflation has been on the rise. And as such, investors have lost confidence in the market. Rates have been above 10% in the UK and the US at times this year. And as a result, the FTSE 100 is down by over 8% in 2022.

The last five years have also followed a similar trajectory for Lloyds stock. In September 2017, a share in the bank would’ve cost around 68p. Today, it’s 40% lower.

Not all bad news

Despite its poor performance, I think now is a great time to load up on some shares.

The first reason for this is rising interest rates. To fight back against spiking inflation, the Bank of England has been hiking rates. Last week saw the central bank set the rate to 2.25%, a 50 basis points rise. There’s also large speculation that it could reach nearly 6% come next spring.

For Lloyds, this is a positive. This is because higher rates will allow the firm to charge customers more when they borrow from the bank. In turn, the firm will be able to increase net interest margins.

On top of this, I also like the stock because of its low valuation. It currently trades on a price-to-earnings ratio of 6.8, sitting well below the ‘benchmark’ of 10 and the average of its FTSE 100 peers.

Racing inflation also means I’m looking to create streams of passive income. With its 5.1% dividend yield, Lloyds offers this.

Lloyds concerns

With this said, there are a few issues I have with the stock.

Firstly, should interest rates reach as high as predicted, customers are more likely to default on payments.

On top of this, with its sole focus on the domestic market, Lloyds is more prone to the impacts we’re set to see as the UK economy weakens. The impact of the next few months could set Lloyds back in the near term.

As one of the UK’s largest mortgage lenders, the weakening housing market may also spell trouble for the business.

However, its new rental venture, Citra Living, will help it to offset risk through this diversification.

Why I’d buy

So, while the short term may be rocky for Lloyds, I see long-term value in the bank’s shares. The rise we’re set to see in interest rates will benefit it. And with its high dividend yield and low valuation, I think the stock is a smart buy below 45p. I’d happily add Lloyds shares to my portfolio today.

The post Lloyds shares are below 45p! Here’s why I’d rush to buy appeared first on The Twelfth Magpie.

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• Is there any value left in Lloyds shares now they’re over £1?
• Prediction: this UK growth stock will outperform Lloyds shares over the next 5 years
• Barclays, NatWest or Lloyds shares: which is the better pick for a UK retirement portfolio?
• Here’s how much I think Lloyds shares will be worth by the end of 2027
• How to target a tax-free passive income of £1,275 a month on top of your State Pension

Charlie Keough 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.