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Hargreaves Lansdown investors are buying these FTSE 100 stocks! Should I join them?

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These three FTSE 100 shares were the most bought of all UK and international shares via Hargreaves Lansdown last week. But should I buy them for my own stocks portfolio?

Scottish Mortgage Investment Trust

Tech investor Scottish Mortgage Investment Trust (LSE:SMT) has been by far the most popular stock with Hargreaves Lansdown clients. It accounted for 5.56% of all buy orders in the past week.

I like the trust because it gives investors exposure to some white-hot growth sectors. Industries like food delivery, electric vehicles, semiconductor manufacturing and e-commerce are all tipped to expand strongly as themes like digitalisation and decarbonisation click through the gears.

However, I’m not prepared to buy Scottish Mortgages shares. The clamour for tech stocks in recent years means many of the stocks the trust holds look overvalued. I wouldn’t be shocked to see these businesses continue to plummet in price if worries over the global economy pick up again.

A series of troubling news items from key holdings isn’t helping my confidence either. Last week, Tesla announced another mass recall due to steering wheels on its Model Y SUV falling off some of the vehicles.

Legal & General Group

I’d be happier to invest my money in Legal & General Group (LSE:LGEN) instead. I’m not buying yet, but my confidence in the stock has improved following the release of last week’s financials that underlined the resilience of the business.

In spite of the tough economic backdrop, operating profits still rose an impressive 12% in 2022.

I’m expecting sales here to rise strongly over the long term, thanks to favourable demographic changes. More specifically, Britain’s booming elderly population means demand for its pensions and other retirement profits should soar.

I also like Legal & General because of its fantastic cash generation. This helped its Solvency II capital ratio hit a whopping 240% this month, which is good news for investors expecting more market-beating dividends.

The company accounted for 2.63% of buy orders on Hargreaves Lansdown’s platform in the last seven days.

Rolls-Royce Holdings

Rolls-Royce (LSE:RR.) shares accounted for 2.1% of total buy orders via Hargreaves Lansdown last week. But I have no intention to join in the stampede for its shares.

The Rolls-Royce share price continues to soar, thanks to impressive trading updates from the world’s airlines. Higher flying activity boosts the FTSE firm’s servicing revenues along with orders for its engines.

Data indicates that the industry continues to rapidly recover too. The International Air Travel Association said that total global traffic leapt 67% year on year in January, helped by the end of China’s Covid-19 lockdowns. Moreover, traffic was at an impressive 84.2% of January 2019 levels.

However, I’m put off from investing by the elevated levels of debt Rolls carries. At £3.3bn, the company’s net debts cast uncertainty over how it will fund its highly expensive growth programmes like developing new jet engines. It also raises doubt on how large future dividends will be when the firm eventually resurrects its dividend policy.

With Rolls-Royce also battling supply chain problems and high cost inflation, I’d rather buy other FTSE 100 value stocks today.

The post Hargreaves Lansdown investors are buying these FTSE 100 stocks! Should I join them? appeared first on The Motley Fool UK.

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Royston Wild has no position in any of the shares mentioned. The Motley Fool UK has recommended Hargreaves Lansdown Plc 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.

Motley Fool UK 2023