It’s been a calamitous few months for the ITM Power (LSE: ITM) share price. The business — which manufactures ‘green’ hydrogen fuel cells — has halved in value in less than three months. It now trades at around 254p.

Rising fears over ITM’s losses have prompted investors to heavily sell their holdings in the business. But are shareholders being a bit premature in heading for the exits? After all, forecasters think that demand for green hydrogen could explode over the next decade. Does ITM Power’s sinking share price provide an attractive dip-buying opportunity for me?

Revenues leap…

Let’s briefly talk about late January’s latest trading statement. In it ITM revealed that losses before tax increased to £15.3m in the six months to October. This was up from £12m in the same 2020 period.

Pleasingly revenues at ITM recovered strongly from a year before when Covid-19 restrictions hit. These totalled £4.2m in the first half versus just £200,000 the year before. However, this wasn’t enough to offset its considerable operating costs and expenses related to the scaling up of its business, resulting in that widening loss.

… but when will it turn a profit?

City analysts are expecting sales at ITM to continue booming as the adoption of green hydrogen technology surges. Revenues of £4.3m in the last fiscal year (to April 2021) are predicted to shoot to £21.3m in the current period.

This isn’t the end of the story either. Sales are expected to soar to £61.6m next year and then to £129.4m in financial 2024.

The problem for investors, however, is that ITM isn’t actually tipped to make a profit any time soon. Pre-tax losses — which clocked in at £27.5m last year — are expected to exceed £30m for the next three years at least.

ITM’s share price: too cheap to miss?

The global market for hydrogen could be massive. Boffins over at the Hydrogen Council and the IEA believe demand could rocket to between 500m and 550m tonnes per annum by 2050. That compares with the 90m tonnes of the gas that Jefferies researchers estimate is currently used each year. Consumption of the more environmentally-friendly green hydrogen that ITM specialises in could be particularly strong as the battle against climate change heats up too.

ITM Power could well deliver blockbuster profits growth against this backcloth. I’m certainly encouraged by the way the business is stacking up contracts (its contract backlog soared 206% in the year to October, to 499 MW).

But the competing (and in some cases more unique) green hydrogen technologies offered by rival operators could well derail its plans to make monster profits. In fact I’m worried that its huge costs mean it won’t be generating any sort of profit in the near future. This means I also have to consider the possibility that it might issue shares or take on debt to try and grow the business.

I believe that the company has plenty of potential. But then it also carries lots of risk for investors. So despite the slide in ITM’s share price I don’t plan to invest any time soon.

Royston Wild 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.

Facebook owner Meta Platforms (NASDAQ: FB) surprised the stock market on Wednesday 2 February with a bigger decline in profits than analysts had expected. And the outlook statement was downbeat. The company said revenue growth will slow because users were spending less time on the firm’s more-profitable services.

Massive loss of market capitalisation

The revelation caused Meta stock to plunge. And at $238 yesterday, the stock was down more than 25% in just one day. That’s a big move for such a mega-cap company. The market capitalisation was reduced by more than $200m. And according to analyst Graham Neary, that’s the biggest one-session loss of capitalisation suffered by any company in history.

As I write, Meta Platform’s market cap is about $660m. And that means Warren Buffett’s Berkshire Hathaway (NYSE: BRK.A) is now valued higher by the market with a capitalisation of around $706m. The only companies valued more highly than Berkshire now are Apple, Microsoft, Google owner Alphabet, Amazon and Tesla Motors.

Warren Buffett is rising up the rankings, and rightfully so. The way Buffett has guided the conglomerate to earn annualised returns of 20% since 1964 is nothing short of amazing. It’s the consistency of growth that’s so impressive. And the master investor has done it with a diverse range of businesses and stocks covering several sectors.

I think the widespread nature of his investments makes Berkshire Hathaway stand apart from the other seven mega-caps mentioned. Each of those businesses was built on a narrower focus and operations mainly in just one sector. I’d describe those companies as being driven by entrepreneurial forces, whereas Berkshire has been powered by Buffett’s flair and skill as an investor.

I’d follow Warren Buffett

But is the plunging Meta Platform’s stock price a buying opportunity? The stock could bounce higher again, but it’s not for me. I think there’s a risk that social media platforms could be shunned by investors in the years ahead because of the addictive nature of the services provided to consumers. And I’m also mindful of the many platforms that have risen in popularity only to plunge back down again. For example, it wasn’t so long back that Myspace was hot.

On top of that, I was sceptical when Facebook changed its name to Meta Platforms. It seemed to me the company might already have seen the writing on the wall and was perhaps acting to find new markets to preserve revenue. However, the idea that some alternative reality may catch on baffled me. I like real life, thank you very much!

I’d be much more inclined to look for opportunities to buy shares in Berkshire Hathaway, such as dips, down-days, corrections and bear markets. But I’m even keener on applying Buffett’s well-documented stock-picking methods to choosing my own shares for a portfolio.

There are no guarantees of a positive investment outcome because all shares carry risks, as we’ve seen with Meta Platforms. However, I think a few well-chosen stocks would work well in my portfolio alongside a selection of index tracker funds. And I’d choose my stocks from both the UK and North American stock markets.

John Mackey, CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool’s board of directors. Randi Zuckerberg, a former director of market development and spokeswoman for Facebook and sister to Meta Platforms CEO Mark Zuckerberg, is a member of The Motley Fool’s board of directors. Teresa Kersten, an employee of LinkedIn, a Microsoft subsidiary, is a member of The Motley Fool’s board of directors. Kevin Godbold has no position in any of the shares mentioned. The Motley Fool UK has recommended Alphabet (A shares), Amazon, Apple, Microsoft, 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.

While the FTSE 100 has largely held its own, individual share prices of some of the UK’s biggest companies have crashed since the beginning of 2022.

I’m delighted! Let me explain why.

Opportunity knocks

One of the great things about being a Foolish investor is that I can take a long-term view of stocks. I don’t need to worry too much about, say, the latest scandal at Downing Street, or a possible military conflict in Eastern Europe. That’s because I’m looking to grow my wealth slowly but surely over the years. Today’s headlines are tomorrow’s fish and chips wrapper.

Nor do I need to fixate on the quarterly or annual performance of my portfolio. Knowing the equities have consistently shown themselves to be the most lucrative asset I can own over decades is enough. 

Contrast this attitude with that of the typical professional investor. They know that underperforming a benchmark (the FTSE 100 in many cases) for too long could put their job at risk. As a result, they can be forced to move out of underperforming stocks, regardless of their overall quality.

One example of this, in my opinion, is health & safety equipment maker Halma (LSE: HLMA). As I type, its shares are down 22% in 2022. This looks like a great buying opportunity to me.

Quality FTSE 100 stock

I certainly don’t think there can be any doubt over whether Halma is a good company. For years now, the business has been steadily growing revenue and profits. And given no client wants to be seen to be compromising the safety of its employees, or bypassing regulations, I have no doubt this will continue for many years to come. 

Halma is also in a strong financial position. Having barely any debt on its books should mean that the £9bn-cap can continue acquiring smaller enterprises and throwing cash at research & development. 

While perhaps of less importance for the committed growth investor, it’s also worth pointing out that Halma’s history of increasing its dividends is second to none.

Although cash payouts are never guaranteed, I don’t know of many other FTSE 100 stocks that have increased their cash payouts by 5% or more in 42 consecutive years. Considering just how many challenges the UK stock market has faced over this period, that’s got to count for a lot.

Time to buy?

Despite falling so far, Halma’s shares still change hands for 38 times forecast FY22 earnings. That’s a rich valuation in anyone’s book. It is however, significantly lower than when I last looked at the company in November 2021. Back then, this FTSE 100 member’s P/E stood at nearly 50!

The fact that I was a prospective buyer even back then shows how highly I regard this business. Now that things have fallen back despite no negative news being released, I think it could be time for me to back up the truck.

Of course, the shares could get even cheaper as we progress through 2022 if the rotation into value stocks continues. Indeed, this is why holding a diversified portfolio of stocks remains vital. 

But quality stocks are rarely without friends for long. If ever there was a FTSE 100 firm where a 20% drop in its share price should be celebrated by long-term investors like me, it’s this one. 

Paul Summers has no position in any of the shares mentioned. The Motley Fool UK has recommended Halma. 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.

As an income investor, I want to buy stocks that are reliable dividend payers. There’s little benefit to me of investing in a company with a high dividend yield if the business is performing badly. In this case, the dividend is likely to be cut. Rather, I want to find stocks with years of dividend growth. With that in mind, here are a couple of FTSE 100 dividend stocks with a long history of growing their income payments. Of course,  I have to remember that a good track record is no guarantee for the future. 

A FTSE 100 old-timer

The first company is Unilever (LSE:ULVR). It’s a group that owns a host of brands from different sectors. These include Dove, Lynx, Hellmann’s, Magnum and plenty of others. This is one reason why I like the prospect of buying its shares. It’s a great consumer staples stock that should help me weather future uncertainty in the market. 

Regardless of tensions with Russia, another Covid-19 variant, goings-on at 10 Downing Street or other headline-grabbing issues, Unilever should be able to go about its business. Demand for the brands should remain firm and isn’t directly liked to the state of the UK economy.

Its robust, long-term demand is shown by the 20+ years of consecutive dividend per share growth. The current dividend yield is 3.77%, above the FTSE 100 average. Even though it’s not as high as some other flagship FTSE 100 dividend stocks, it doesn’t bother me. The reliability of the income payments makes up for this.

One risk is the performance and mindset of the management team. The CEO and CFO have been criticised in recent weeks following what was seen by many as a poor and overpriced attempt to buy GlaxoSmithKline’s Consumer Health unit. I also need to note that the share price has fallen by 12% over the last year.

An above-average-yield company

The second FTSE 100 dividend stock I’m thinking about buying is British American Tobacco (LSE:BATS). The large multinational tobacco manufacturer has been a feature in many dividend portfolios over the years. It offers an attractive dividend yield, currently at 6.76%. More than this, it has over 20 years of consecutive dividend per share growth.

A risk straight off the bat is that some just won’t consider owning a tobacco company. The negative screening criteria associated with a tobacco company means that it does get a lot of bad press. With a strong focus on ESG investing in the market at present, the company could struggle to see share price gains as many will decide to invest elsewhere.

On the flipside, there’s still a lot to like about the brand. The share price is up 18% over the past year, as the company invests more in New Category products (such as vapes). In a recent trading update, it commented that it had “strong acquisition of consumers of non-combustible products, up 3.6m Sept, year-to-date to 17.1m”.

If it can continue on this pivot and grow a solid market share in this alternative sector, then I think the future could be positive for the FTSE 100 dividend stock.

Jon Smith owns no share mentioned. The Motley Fool UK has recommended British American Tobacco, GlaxoSmithKline, and Unilever. 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.

As earnings season has approached, growth stocks have continued to struggle. This is due to a set of poor earnings from many of the big players, excluding Microsoft, Apple and Alphabet that continue to impress. On Wednesday, the PayPal  (NASDAQ: PYPL) share price sank around 25% due to poor future guidance, dropping further yesterday. Yesterday, Meta (NASDAQ: FB) stock crashed over 25% due to weak earnings and guidance. Do these large crashes create buying opportunities though?

PayPal: a growth stock with slowing growth!

As a PayPal shareholder, I was very disappointed in the company’s full-year trading update. This was due to the company’s extremely weak forward guidance. In fact, due to issues of inflation, supply chain pressures and weakening e-commerce figures, expected growth for 2022 was far lower than expected. In fact, revenue is ‘only’ expected to increase around 16%, compared to previous forecasts of 18%. It also only expects adjusted EPS of $4.60-$4.75, and that’s far lower than analyst expectations of $5.26. It also represents no real profit growth from this year.

Clearly, these are all big worries, and PayPal has already abandoned its medium-term goal of reaching 750m users after finding that many of the new customers it had added had not actively been using the service.

But while short-term volatility looks set to continue, I still believe that PayPal is a good long-term option. Indeed, its recent partnership announcement between its subsidiary Venmo and Amazon, will hopefully have a positive effect. Further, many of the current issues seem short term. Therefore, I’m tempted to add a few more shares at current levels, especially as the price-to-earnings ratio has now dropped to below 30. For a growth stock, this seems incredibly cheap.

Meta is also suffering

Meta was the big faller yesterday, after its Q4 trading update severely underwhelmed investors. This was partly due to the rise of TikTok over the past couple of years, which had seen customers move away from Meta’s platforms such as Facebook and Instagram. Indeed, daily active users actually dropped from 1.93bn in the previous quarter to 1.929bn during the fourth quarter. While this drop is not huge, any drop at all is very negative for a growth stock. Disappointing forward guidance, with Q1 revenues expected to increase around 7% year-on-year, also caused the fall of over 20% yesterday.

But there are also arguments that this crash may offer a great time to buy. Indeed, the stock now only trades at a price-to-earnings ratio of 18, which is a historically very low level. Further, Meta will hopefully play a very large role in the metaverse in the future, which may aid growth. As such, although I’m going to avoid the stock right now, due to the volatility and ongoing sell-off that we’re likely to see, it’s certainly on my watchlist. If it dips too low, I may add some of the shares to my portfolio.

John Mackey, CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool’s board of directors. Randi Zuckerberg, a former director of market development and spokeswoman for Facebook and sister to Meta Platforms CEO Mark Zuckerberg, is a member of The Motley Fool’s board of directors. Teresa Kersten, an employee of LinkedIn, a Microsoft subsidiary, is a member of The Motley Fool’s board of directors. Stuart Blair owns shares in Apple and PayPal Holdings. The Motley Fool UK has recommended Alphabet (A shares), Amazon, Apple, Microsoft, and PayPal Holdings. 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 a tough time for growth shares at the moment. With investor uncertainty on the rise about the long-term effects of inflation, the prices of once-thriving stocks are tanking. As horrible as this is to watch, I’m personally not concerned.

Market corrections like this one can offer excellent buying opportunities for my portfolio. And I’m following the wisdom of legendary investor Warren Buffett to “be fearful when others are greedy, and greedy when others are fearful”.

With that in mind, let’s explore two UK growth shares from my portfolio that I think have been oversold by panicking investors. I’d like to buy more of both.

A fintech disrupting corporate banking

Alpha FX (LSE:AFX) provides two main solutions to small and medium-sized businesses. The first is a currency risk management service. And the second is a suite of alternative banking tools, including the capability of completing international enterprise-scale transactions significantly faster and cheaper than traditional methods.

Over the last 12 months, this growth share has actually climbed by an impressive 30%. That certainly doesn’t sound like a stock in distress. But since the start of 2022 it’s down by almost 20% following its latest trading update.

Despite what the downward trajectory suggests, the report was actually quite encouraging, in my opinion. Revenue for 2021 is expected to come in ahead of analyst expectations at £77m – a 67% year-on-year jump. What’s more, this rapid growth has offset the expected margin pressures from increased hiring and newly acquired office space.

To me, this looks like a growth share caught in the crossfire of the current market environment. But I will admit, its valuation remains fairly lofty with a price-to-earnings ratio of 39. That could open the door to further volatility. However, given the consistent performance delivered by management so far, this is a risk I’m willing to take.

A growth share in the digital marketing space

Unlike Alpha FX, dotDigital‘s (LSE:DOTD) 12-month performance hasn’t been as pleasant. In fact, the growth share is down more than 20% over the last year. As a reminder, this company provides a cloud-based data-driven marketing platform from which companies can automate their advertising campaigns to maximise sales.

With so many new e-commerce businesses popping up, courtesy of the pandemic, demand for dotDigital’s solution seems to be skyrocketing. At least, that’s what the latest trading update would suggest, despite the lacklustre share price performance.

Going into the numbers, average revenue per customer (ARPC) increased by 19% during the second half of 2021, reaching £1,422 per month. And in turn, this pushed total half-year revenue up by 10% to £30.9m.

In my experience, when a business delivers solid results, and the share price falls, it’s usually a great buying opportunity. However, it’s not a risk-free endeavour. Scrutiny and regulations surrounding data privacy are mounting. Apple has already implemented data gathering restrictions on all devices running iOS 14. And given that dotDigital’s platform is built around analysing user data, it could create complications.

But this isn’t the first time restrictions on data gathering were implemented. And since the company was able to promptly adapt to the introduction of GDPR, I remain confident it can do the same again. That’s why I see the latest tumble in this growth share as a buying opportunity for my portfolio.

Zaven Boyrazian owns Alpha FX and dotDigital Group. The Motley Fool UK has recommended Alpha FX and dotDigital 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.

The Meta Platforms (NASDAQ: FB) share price fell off a cliff yesterday. That came as a less-than-encouraging quarterly report alarmed already-battered tech investors. Revenue in Q1 is expected to be somewhere between $27bn and $29bn, rather than the $30bn expected by analysts. The number of active users also declined, a first in the company’s 18-year history. 

Should I be using this weakness as an opportunity to load up on the owner of Facebook, WhatsApp and Instagram? Like the relationship status on some of its users’ home pages, “it’s complicated“.

Meta share price: is the reaction overdone?

In certain respects, I think the reaction is too extreme. A fall from 1.93bn to 1.929bn active users in the last three months of 2021 is nothing to worry about, I feel. But the market reaction suggests Facebook’s growth is history. That strikes me as somewhat ludicrous.

In reality, I expect the company will adapt and overcome, as any good business does. Meta owns a staggering amount of data and information on users that it can then sell to advertisers. It also remains a hugely profitable business.

Like him or not, founder Mark Zuckerberg isn’t going anywhere either. At just 37, this isn’t the first challenging period faced by Meta’s chief and it won’t be the last. For me, the Cambridge Analytica scandal in 2018 was far more concerning. Even the best stocks miss earnings targets now and then.

Reasons to be fearful

This isn’t to say the company doesn’t face substantial challenges going forward. Some or all of these could put further pressure on the Meta share price. 

The popularity of rival apps such as TikTok and Alphabet-owned YouTube will certainly be playing on owners’ minds. The introduction of the App Tracking Transparency Policy by fellow tech titan Apple is another potentially huge headwind. Yes, the so-called metaverse being created by the company could be the solution to both problems. But this will take time to develop and cost billions of dollars in the process. 

And if all of this weren’t enough, there’s the much-discussed rotation into value stocks in 2022. Investors become rattled over the prospect of quicker-than-expected interest rate hikes are leading this. Meta may get back on track in the next quarter. But wider market sentiment could still delay a recovery. The mere whiff of increased regulation won’t help.

I’m a buyer (sort of)

On balance, I’m inclined to think Thursday’s movement in the Meta share price was another example of stock market myopia. A good company doesn’t become a bad one in three months. Being able to look further ahead than a few weeks is one of the few, very powerful, advantages I have over professional investors whose careers are on the line.

I’m perfectly content to increase my exposure to the company via quality-focused funds such as Fundsmith Equity and LF Blue Whale Growth rather than buy the stock directly. This strategy may reduce my gains in the event of Meta making a strong recovery. But it’s much easier than trying to time my entry when growth stocks are being hammered across the board.

Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool’s board of directors. Randi Zuckerberg, a former director of market development and spokeswoman for Facebook and sister to Meta Platforms CEO Mark Zuckerberg, is a member of The Motley Fool’s board of directors. Paul Summers owns shares in Fundsmith Equity and LF Blue Whale Growth. The Motley Fool UK has recommended Alphabet (A shares) and Apple. 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.

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Shares in Trustpilot (LSE: TRST), which went public last year, are having a terrible run in 2022. Year to date, the share price is down about 50%.

The last time I covered Trustpilot, in October, I had issues with the stock’s high valuation. However, since then, this has come right down. Is this a buying opportunity for me? Let’s take a look.

Is now the time to buy the shares?

A recent trading update from Trustpilot, posted on 12 January, showed that the growth story here is still intact. For the year ended 31 December, total revenue came in at $131m, up 24% year-on-year on a constant-currency basis. According to CEO Peter Holten Muhlmann, this was ahead of expectations. Meanwhile, annual recurring revenue (ARR) amounted to $144m, up 26% at constant currency.

Looking ahead, City analysts expect Trustpilot to generate revenue of $165m for 2022. If the group can achieve this, it would represent top-line growth of around 26%.

These numbers suggest to me that Trustpilot is still enjoying a healthy level of growth. However, I’ll point out there’s no guarantee the company will continue growing at this rate. If rivals were to steal market share (‘barriers to entry’ here seem quite low, to my mind), growth could slow.

Is it making any money?

Of course, just because Trustpilot is growing at a healthy rate doesn’t mean the company is a good investment. One thing we also need to look at is profitability. Is Trustpilot making any money? Because if it’s not, it’s going to be a higher-risk investment. One reason the share price has tanked recently is that investor sentiment towards unprofitable software companies has really deteriorated.

Looking at analysts’ forecasts, Trustpilot is not expected to generate a profit in the near term. For 2021, they expect a net loss of $14.5m. And for 2022, a net loss of $7.3m is pencilled in.

This lack of profitability is a bit of an issue for me. That’s because the stocks of unprofitable companies tend to be both highly volatile and highly unpredictable. I prefer to invest in companies that are already profitable.

Is the Trustpilot share price too low?

We also need to look at the stock’s valuation. Is there value on offer here after the recent share price fall Well, Trustpilot doesn’t have a price-to-earnings ratio because it’s unprofitable. But it does have a price-to-sales ratio and that’s about 5.5 on a forward-looking basis.

That valuation is not that high, to my mind, given that Trustpilot has a strong level of recurring revenues. At that valuation, I do see a little bit of value on offer.

My view now

Putting this all together, I can see some appeal in Trustpilot after the recent share price fall. The company is still growing and the valuation doesn’t seem that high.

However, given the risks, Trustpilot isn’t a buy for me right now. Ultimately, it doesn’t make my ‘best stocks to buy’ list.

Edward Sheldon 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.

Fundsmith portfolio manager Terry Smith is often called ‘Britain’s Warren Buffett’ and it’s not hard to see why. Since Smith launched his fund back in 2010, he’s turned £10,000 of investor money into more than £60,000.

Here I’m going to examine Smith’s current portfolio and discuss where he’s investing in 2022. Let’s take a look at where this top money manager is putting capital to work right now.

Where ‘Britain’s Warren Buffett’ is invested in 2022

Fundsmith’s latest factsheet reveals Smith is currently invested in three main areas:

Combined, these areas of the market represented about 98% of the Fundsmith portfolio at the end of January.

Let’s now look at some of the stocks he has invested in within these sectors. 

Technology and Communication Services

Within Technology and Communication Services, two of Smith’s largest holdings are BigTech companies Microsoft and Meta Platforms (Facebook). At the end of January, these two were in his top 10 holdings. But these aren’t the only BigTech stocks Smith owns. Last year, he bought Amazon and he’s just bought Alphabet (Google) for his portfolio. Clearly, Smith is bullish on BigTech.

Smith has exposure to other areas of technology though. He also has exposure to the FinTech market through PayPal and Visa, as well as the software industry through smaller tech companies such as Intuit.

Healthcare

In the healthcare space, Smith has exposure to a diverse mix of companies. One of his largest holdings here is Novo Nordisk, which specialises in diabetes products. Another large holding is Idexx Laboratories, which specialises in pet healthcare. Both of these stocks were also in his top 10 holdings at the end of January.

Other healthcare holdings include Stryker, which makes medical equipment, Coloplast, which specialises in continence care and wound care, and Johnson & Johnson, which is a diversified healthcare company.

Consumer goods

Within the consumer goods space, Smith appears to have taken a ‘barbell’ approach. On one hand, he owns companies that make everyday essentials such as Unilever, McCormick, and Church & Dwight, makers food and cleaning products. On the other hand, he owns a number of companies that make premium/luxury products such as Diageo, LVMH, L’Oréal, and Estée Lauder.

My take on Smith’s holdings

As a Fundsmith investor, I like this mix of investments. I like the fact that Smith has plenty of exposure to the tech sector, given where the world is heading.

I also like the fact that Smith has plenty of exposure to healthcare. With the global population ageing, demand here is likely to rise in the years ahead. Healthcare is also quite defensive. 

Finally, I like the barbell approach to the consumer goods space. Companies like Unilever and Church & Dwight tend to be recession-proof, due to the fact they make everyday essentials. Meanwhile, companies like LVMH and Estée Lauder appear well-placed to benefit from rising wealth across the world.

Overall, I think Smith has a nice mix of investments for 2022. So I’m very comfortable holding the Fundsmith Equity fund in my portfolio right now.

John Mackey, CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool’s board of directors. Randi Zuckerberg, a former director of market development and spokeswoman for Facebook and sister to Meta Platforms CEO Mark Zuckerberg, is a member of The Motley Fool’s board of directors. Teresa Kersten, an employee of LinkedIn, a Microsoft subsidiary, is a member of The Motley Fool’s board of directors. Edward Sheldon owns Alphabet (C shares), Amazon, Diageo, Idexx Laboratories, Visa, PayPal, Intuit, Microsoft, and Unilever and has a position in Fundsmith. The Motley Fool UK has recommended Alphabet (A shares), Amazon, PayPal, Diageo, Idexx Laboratories, Microsoft, and Unilever. 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.