Roughly a quarter of the stocks in the Footsie are up over the last 12 months. That leaves the majority in the red, including the following two top FTSE 100 stocks. Given their lower starting positions, I think each one could turbocharge my overall portfolio returns over the next few years.
The go-to property platform
The UK property market is under pressure at the moment. Rising interest rates have made mortgages more expensive, and house prices have started to fall. Banking giant Lloyds is forecasting UK house prices will drop 8.8% next year, then slide again in 2023 and 2024, before returning to growth the year after.
Whether this is accurate remains to be seen. What we do know is that this uncertainty has resulted in a lower Rightmove (LSE: RMV) stock price. The shares are down 38% year-to-date.
Yet the property portal’s dominance remains unchallenged in the UK, with an 84% market share. It gets over 140m visits per month, with people collectively spending an incredible 1.5bn minutes on its platform during that time.
In the first half of 2022, the company grew revenues 9% year on year to £162.7m. Operating profit of £121.3m was up 6% on 2021. This profitability isn’t unusual for Rightmove as its asset-light business model means its operating margin is regularly above 70%. The company also bumped the dividend up 10%.
Despite the risks of a property slump, I’m confident the housing market will eventually recover, as it always has done. And I think Rightmove will remain the go-to property platform. I’m going to start a position in the shares next month.
Taking the long view
The aim of Scottish Mortgage Investment Trust (LSE: SMT) is to find the greatest growth companies in the world and — ideally — own them for a very long time. The trust has had great long-term success using this strategy, finding the likes of Amazon and Tesla relatively early on and reaping the rewards.
However, the last 12 months have been tough for its shareholders. The stock price has been cut in half as investor sentiment towards growth companies has soured. Still, I’m excited about the long-term potential of the companies the trust has in its portfolio.
One thing I’m less enthusiastic about is the large positions it has in Chinese stocks. According to PricewaterhouseCoopers, the government in Beijing nationalised more than 110 publicly traded Chinese companies between 2019 and 2021.
It seems that the more successful a business becomes in China, the more it’s in the sights of the authorities.
I owned shares in the likes of Alibaba and NIO once upon a time. But I sold them a while back when it became clear to me that they might be de-listed from US stock markets.
Nevertheless, over the long term, I believe Scottish Mortgage shares will come back strongly. It should be remembered that the stock is still up 450% over the last decade, even after this year’s decline.
I haven’t topped up my position in Scottish Mortgage for a few years now. But I hope to treat myself to a few more shares this month, or before Christmas if it doesn’t make my November buy list. It’s down 50%, so I reckon the stock is begging for me to buy it.
