Why I’m Buying More Scottish Mortgage Shares This Month

As a savvy investor, I’m always on the lookout for undervalued stocks that have the potential to grow my wealth. Recently, I’ve been eyeing Scottish Mortgage Investment Trust (LSE: SMT), a FTSE 100 stalwart that has been on my watchlist for a while. After snapping up some shares last month, I’m eager to add more to my portfolio. Here’s why.

Valuation

The main factor that tempted me to invest in Scottish Mortgage is its undervaluation. With its share price trading 42% lower than its all-time high of £15.28, which it reached back in November 2021, I believe it’s a steal. Additionally, the trust is trading at a 9.4% discount to its net asset value (NAV), making it an attractive buy.

Undervalued stocks can be a great opportunity for investors

Gaining Momentum

Scottish Mortgage has been gaining momentum recently, with its share price up 12.5% year to date and 39.1% over the past year. While it’s not as cheap as it was, I still believe it has room to grow.

Artificial Intelligence

One reason I’m bullish on Scottish Mortgage is its focus on the artificial intelligence (AI) sector. The trust owns top names in the industry, such as Nvidia, ASML, and Tesla. With the AI market predicted to boom in the years to come, I believe Scottish Mortgage is well-positioned to benefit from this trend.

The AI market is expected to continue growing

Risks

Of course, there are risks involved with investing in Scottish Mortgage. One concern is that over a quarter of the fund’s holdings are private companies, which can be challenging to value. Additionally, the trust’s performance can be volatile due to its focus on areas like AI and its heavy weighting to growth stocks.

Investing always involves some level of risk

Conclusion

Despite the risks, I believe Scottish Mortgage has the potential to excel over the long run. With its cheap price and focus on AI, I’m confident that it will continue to grow my wealth. If you’re looking for a undervalued stock with growth potential, Scottish Mortgage might be worth considering.

Scottish Mortgage has growth potential