Stock markets are shaking as investor confidence plummets. But this isn’t dampening my appetite for UK shares. I’m taking the approach of legendary investor Warren Buffett and looking to capitalise on volatility to build wealth.
One good idea in uncertain times is to see what other investors are buying. I’m personally looking at how share pickers using Hargreaves Lansdown’s platform have been investing in recent days.
Here are two of the most popular stocks that Hargreaves Lansdown investors have bought in the past week. I think they are great buys for those following Warren Buffett’s investing strategy.
Glencore
Hunting for value is a key part of the Berkshire Hathaway chief’s investing strategy. He doesn’t focus on low price-to-earnings (P/E) ratios or book value, but rather on what he coins a stock’s “intrinsic value”.
This can be assessed in a variety of ways. But it seems that Hargreaves Lansdown investors are heavily buying ultra-cheap Glencore (LSE: GLEN) shares. The FTSE 100 miner is the second most frequently traded stock purchased in the past seven days, accounting for 1.35% of all buy orders.
Glencore’s share price has leapt 25% in 2022 even as worries over global growth — and by extension demand for commodities — have exploded. This is even though this has the potential to take a big bite out of mining sector earnings.
It seems that investors continue to think Glencore is trading below value. And I’m inclined to agree with them. The company owns a portfolio of world-class mines producing copper, cobalt, and a range of other raw materials, demand for which could soar as the move to renewable energy and electric cars takes off.
Warren Buffett might not care for P/E ratios. But the rock-bottom reading of 3.6 times that Glencore’s share price currently commands merits attention in my opinion. The miner also carries an enormous 10.7% dividend yield today.
Vodafone Group
Buffett recently liquidated his entire holdings in Verizon Communications. But don’t assume that the ‘Oracle of Omaha’ has suddenly taken a bearish position in the telecoms space. After all, Berkshire Hathaway continues to hold shares in both T-Mobile and Liberty Global.
I’m certainly optimistic about the fortunes of FTSE 100-quoted Vodafone Group (LSE: VOD). And so are many investors who trade through Hargreaves Lansdown. Vodafone was the 10th most frequently traded stock in the past week, accounting for 0.79% of all buys.
There are two big threats to telecoms companies like this. The industry in which they operate is highly competitive. And their operations are highly capital-intensive, which can in turn damage profits and shareholder returns.
But on balance I think Vodafone is a great share to buy for the future. Telecoms demand is set to keep growing strongly as the digital revolution carries on. It’s why this particular company is spending fortunes on 5G and broadband rollout in its markets.
I also like Vodafone’s huge exposure to Africa. It has more than 270m customers on the continent, where it operates in both the fast-growing telecoms and mobile money sectors.