I’m looking for investing ideas for my Stocks and Shares ISA this February. So I’ve been looking at what Hargreaves Lansdown clients have been buying in recent weeks to help me.
Excluding any sales, these were the 10 most-bought shares with Hargreaves Lansdown’s ISA investors in January:
- Lloyds Banking Group
- Nvidia
- Tesla
- BAE Systems
- Glencore
- JD Sports Fashion
- Greggs
- Microsoft
- Legal and General Group
- Phoenix Group
2 FTSE stocks on my radar
A couple of those FTSE 100 stocks are already on my own wishlist right now: BAE Systems (LSE:BA.) and JD Sports Fashion (LSE:JD.). Here’s why I’m hoping to buy them for my ISA when I next have cash to invest.
Strong momentum
BAE Systems’ share price has been one of the Footsie’s best performers since Russia’s invasion of Ukraine in early 2022. Europe’s bloodiest conflict since World War Two, and the emergence of fresh turmoil in the Middle East, means that rapid re-arming in the West looks set to intensify.
The company’s scale and expertise across multiple defence sectors means demand for its product is soaring against this backdrop. It recorded £21.1bn worth of orders in the first half of 2023, which in turn drove its order backlog to a record £66.2bn.
Military spending across North America and Europe cratered following the end of the Cold War. This has created a large hole in materiel resources across land, air, and sea, which defence companies will have a significant opportunity to fill over the next decade.
BAE Systems’ profits outlook is also boosted by soaring arms budgets (and intensifying security concerns) in emerging markets. The world’s sixth-largest defence company is also a major supplier in the Middle East, and is reporting increased sales across Asia, Africa, and Latin America.
Demand for its products may not necessarily translate to strong sales and earnings growth, however. On the whole, defence companies have struggled to ramp up production more recently due to labour shortages and supply chain issues.
While this could remain a threat going forwards, on balance, I believe BAE Systems shares are highly attractive today.
Stunning returns
Sports apparel retailers like JD Sports are having a rough time as weak consumer spending persists. Indeed, softer (and more promotion-led) trading of late led this FTSE company to issue a share-price-crushing profit warning in January.
I haven’t been put off from wanting to buy JD shares for my ISA, however. Recent share price weakness leaves the firm on a price-to-earnings (P/E) ratio of just eight times. It also changes hands on a sub-one price-to-earnings (PEG) ratio of 0.7.
These readings more than reflect the possibility of further trouble as the market remains soft, in my opinion. What’s more, I don’t believe the company’s excellent long-term potential is fairly baked in at current prices.
Demand for premium athleisure has been growing strongly over the past decade and is tipped to continue booming. As a consequence, JD continues to boost its global footprint and market position through acquisitions and organic investment. It opened 200 stores in the last year alone.
This recipe has seen the retailer deliver a stunning 1,000%+ return to its investors the start of 2014. I’m expecting it to keep producing the goods over the next 10 years, too.
