BP, Phoenix Group and Rolls-Royce are the top 3 stocks Hargreaves Lansdown investors have been buying.

It's always interesting to watch Hargreaves Lansdowne's 'Top Stocks' page. This highlights the stocks that the company's clients have been buying the most in the past week. Last week, the three most bought stocks were BP (LSE: BP.A), Phoenix Group (LSE: PHNX) and Rolls-Royce (LSE: RR.). So what attracts investors to these names?

BP

I am not surprised that investors have piled into BP. Towards the end of September, the stocks experienced a sharp fall. Meanwhile, oil prices rose last week following the escalation of regional conflicts in the Middle East.

However, I have no plans to buy shares. For me, they are very unpredictable. If oil prices continue to rise, BP's share price is likely to rise. However, if oil prices fall, stocks may face further weakness.

Another problem for me is that the company doesn't seem to have a clear strategy. A few years ago, BP said it was working on renewable energy. Today, however, the company seems to be reversing its strategy to change power. According to the latter Reuters report, it is now looking for new investments in the Middle East and Gulf of Mexico to increase its oil production.

It is good to point out that stocks are cheap. paid a dividend of 5.7 %. As a long term investor, I think I can do better than BP.

Phoenix Group

Moving on to the Phoenix Group, it experienced a pullback in the second half of last week. And investors clearly saw this as a good opportunity to buy a high-yield dividend stock (the yield today is 10.5%).

It's worth looking at why the share price is falling though. It seems to me that the weakness driver has been lowered UBS. In a note to clients, the company downgraded Phoenix Group from Buy to Neutral and lowered its price target to 530p from 610p. “Low solvency and high leverage remain a risk in the investment case“, they wrote.

Although the debt is risky, I might consider this stock if I were looking for income from my investment. The dividend coverage is low, which is unfair. However, the company generates a lot of money. Therefore payment should be secured in the near term.

Rolls-Royce

Finally, it's no surprise that investors have been buying Rolls-Royce as this has been one of the best-selling stocks for years now.

Now, I understand why investors piled into this stock two years ago when it was trading below £1. But today, the investment case is not so clear to me.

Yes, the company's profit is increasing rapidly, thanks to the positive business change from CEO Tufan Erginbilgiç. But a lot of success seems to be priced into the stock already.

Currently, the forward P/E ratio here is 29.5, falling to 25.1 using next year's earnings forecast. This is high repeatability and doesn't leave a lot of room for error (eg engine problems or landing).

Indeed, the stock price trend is clearly higher. And trends can persist for a long time. For me though, the risk/reward proposition is not attractive. Given the valuation, I think there are better stocks to buy for my portfolio.