ArtsAutosBooksBusinessEducationEntertainmentFamilyFashionFoodGamesGenderHealthHolidaysHomeHubPagesPersonal FinancePetsPoliticsReligionSportsTechnologyTravel

Best FTSE 100 Shares To Buy

Updated on November 22, 2014

For US Investors

US Investors may buy these shares in the US and receive dividends in US Dollars by purchasing ADRs (American Depositary Receipts). These are listed on US stock exchanges (NYSE, NASDAQ, OTC etc) and trade in the same way as native shares.

Important Introduction

In this hub we are going to go through a few of my favorite shares in the FTSE 100 and consider the investment rationale for each of them. For balance we will also at the risk factors that affect their businesses. Hopefully this article will steer you in the direction of Britian's most high quality and competitive companies that should provide you with good long term investment returns and a growing income.

As a value investor of the Buffett-Munger school I will perform the analysis with regard to that philosophy. Obviously this article is not updated daily so the valuation aspect will not factor into the considerations. Consequently I would advise you to study the company and decide whether its current valuation is appropriate. The real secret to successful investing is buying high quality companies at low prices and holding them so that you can take advantage of the high internal rates of return (i.e. increasing intrinsic value) generated by them.

However the most important point you must be aware of is that: this article is not a sufficient basis for any investment decisions and intends only to highlight companies of interest. Buying individual shares is a higher risk strategy and requires extensive and diligent research at a level beyond the scope of this article.

Ever Expanding Portfolio

Diageo has been buying into United Breweries which is India's largest alcohol company. As well as access to the Indian market, the acquisition gains Diageo exposure to iconic scotch brands such as Whyte & Mackay strengthening its scotch franchise.
Diageo has been buying into United Breweries which is India's largest alcohol company. As well as access to the Indian market, the acquisition gains Diageo exposure to iconic scotch brands such as Whyte & Mackay strengthening its scotch franchise.

Diageo (DGE)

If you were to attempt to create the worlds best collection of premium drinks brands the result would probably look a lot like Diageo. Consider their brands: Smirnoff, Johnny Walker, Bailey's, Canadian Club, Guinness, J&B, Bells, Captain Morgan, Gordon's, Archers and Sterling Vineyard. In addition Diageo holds stakes in Moet Hennessy and United Breweries while also owning the Gleneagles hotel.

The main competitive advantages for Diageo come from the strength of its distribution channel and its brand recognition. If you go into a bar and ask for a vodka and coke more often than not the vodka is going to be Smirnoff which is owned by Diageo. Put simply a bar that doesn't stock Diageo's products is going to have trouble.

The growth in Diageo's business is driven by emerging markets and pricing power. Fundamentally Diageo is very similar in business terms to the Coca-Cola Company. As emerging markets grow the number of people in the middle class is likely to explode. The importance of this is that the second you enter the middle class you start to be a consumer. You don't just want food on the table; you want sauce on the food and wine for afterwards. This transition is what Diageo investors are really investing in. That's why the shares have historically been so expensive.

Standard Chartered (STAN)

Standard Chartered is a large international bank that operates principle in Africa, Asian and the Middle East. Fundamentally Standard Chartered is a trade finance bank as it finances - at the time of writing - around 6% of world trade. It also has a presence in consumer (current accounts, mortgages and credit cards etc) and investment banking. The bank is highly geographically diversified and has historically maintained a well capitalized and liquid balance sheet. The strength and diversity of Standard Chartered allowed the bank to escape the financial crash relatively unharmed.

Clearly much of the rationale of investing in Standard Chartered centers around its superior growth prospects. The markets where Standard Chartered operates are likely to grow significantly faster than developed markets. Furthermore it is important to note that demand for financial services has historically grown faster than the top line GDP growth figure. Fortunately for investors this growth has historically had value as Standard Chartered has been able to deliver profit growth above the cost of capital.

However, although Standard Chartered has a very strong franchise it is not without risks and I would expect that the shares will be a bumpy ride over the long term. The main reason for this is that emerging markets tend to be highly volatile and changes in emerging market sentiment strongly impact Standard Chartered's business. However, being good investors we should know the difference between volatility and risk.

Sources of Competitive Advantage

High Barriers To Entry
Starting a competitor is prohbitively expensive
Big Tobacco, Railroads
Large Base of Installed Equiptment
Recuring revenue from previous sales
Microsoft Windows, Elevator Industry
Global Distribution Channels
Very expensive to build
Coca Cola System
Ecconomies of Scale
Only large companies can compete effectively with you
Companies cannot legally compete with you
Pharmacuticals, Aerospace and Defense Industry
Exclusive Contracts
Significant legal barriers to competition
Customer Captivity
Cannot get the product/service anywhere else or otherwise have to use the company
Moody's Corporation
High Switching Costs
A customer could move provider but its difficult or expensive to do so
Microsoft, Kone

GSK Products


  • Advair
  • Paxil
  • Avodart
  • Flovent
  • Augmentin
  • Lovaza

Consumer Healthcare

  • Aquafresh
  • Boost
  • Sensodyne
  • Horlicks
  • Night Nurse
  • Nicorette
  • Alli
  • Polident


  • Hepatitis B
  • Diptgeria
  • MMR
  • Tetnus
  • Pandemrix


  • ViiV Healthcare
  • Stiefel Dermatology

Glaxosmithkline (GSK)

Glaxosmithkline is currently one of the world's largest healthcare companies. It is often thought of as a pharmaceutical company but it is more accurately described as a healthcare company.

In the FTSE 100 you will also find Glaxo's main UK competitor AstraZeneca. Although Astra is a very good company it is far more difficult to understand. So if pharma is not firmly within your circle of competence then I would not look into investing in Astra as it is a pharmaceutical lead company as opposed to a healthcare company.

Glaxo possesses several strengths which should serve shareholders well over the long term. The first of these is GSK's powerful franchise in respiratory and has historically been able to invest heavily in Research and Development (R&D) to achieve high returns. The astute investor will notice that the market often ascribes little value to drug companies pipelines (i.e. drugs in development) due to the difficulty in analyzing drug pipelines so an edge may be attained in this area.

The vaccines business is another gem in the portfolio. This business has continued to generate high returns for GSK shareholders despite the fact that many of these are now generics. This is due to high switching costs and customer inertia primarily. The recent deal with Novartis wherein GSK essentially swapped their oncology (cancer medicine) business for the vaccine business of Novartis will further strengthen GSK's franchise in vaccines.

However, I would warn investors to proceed with a degree of caution. Although it is possible for most investors to understand GSK it will take you quite a lot of time. A great investing tip is to read trade publications which will give you deep insights into the sector and significantly improve the quality of your analysis.

The Truth About Growth

Growth does not always have value. Investors refuse to understand this. You should only ever pay for growth that occurs within a franchise.
Growth does not always have value. Investors refuse to understand this. You should only ever pay for growth that occurs within a franchise.

Intercontinental Hotels Group (IHG)

IHG is fundamentally a franchising company in much the same way as Domino's Pizza or Yum Brands or Marriot International. IHG owns several hotel brands such as Holiday Inn, Crowne Plaza, Candlewood Suits, Hotel Indigo and, of course, Intercontinental. IHG makes money primarily from franchise fees and management fees. IHG owns hardly any hotels itself but generates revenue from thousands of hotels.

The power of IHG's business model comes from the fact that it is not at all capital intensive. This is why it has such a high return on equity. IHG literally has someone else pay to build a hotel and then gets a cut of the profits though various fees. The great thing about this is that growth costs very little and thus has a lot of value.

Furthermore there remains great scope for growth as the density of hotels in emerging markets is significantly lower than in developed markets. IHG has already positioned itself in these markets and should therefore be able to produce profitable growth over the medium to long term.

My Tesco Clubcard

This is my worn and used Tesco Clubcard and a key competitive strength of Tesco Plc. Though Clubcard Tesco is able to understand its customers and leverage its brand. There is a lot of value imbedded in the millions of these cards in issue.
This is my worn and used Tesco Clubcard and a key competitive strength of Tesco Plc. Though Clubcard Tesco is able to understand its customers and leverage its brand. There is a lot of value imbedded in the millions of these cards in issue.

Tesco's Assets

Stores in: UK, Thailand, Poland, South Korea, Czech Rebublic. Hungary, Turkey, USA, Slovakia, Ireland, China (huge stores), Japan and Malaysia.


  • Clubcard
  • Dobbies Garden Centres
  • Blinkbox
  • Tesco Direct
  • Tesco Bank
  • Tesco Mobile
  • One Stop
  • Harris and Hoole

Tesco (TSCO)

At the time of writing Tesco is very out of favour with the market. You've got the march of the discounters, intense competition, structural problems and a disastrous US venture. However, amongst all of the negativity what appears to have been overlooked is the fact that Tesco is a really wonderful business.

There are a few key strengths that Tesco possesses:

  1. Economies of scale
  2. Geographic diversification
  3. Strong distribution channels
  4. Low cost provider
  5. High barriers to entry

The first thing you need to know about Tesco is that you don't understand it. Look at the list of Tesco's assets on the right. Did you know about all of these? Frankly, looking at Tesco simply as a UK supermarket is simply not enough. Tesco is a highly diverse multi-channel retailer.

Professor Bruce Greenwald Explains Competitive Advantages

Whitbread (WTB)

As you may have figured from my glowing review of IHG; I like franchised businesses. The reason for this is simple: they generate large returns on equity because they have a very low capital intensity. The other great part of these businesses is that they can pay out most of their earnings to shareholders as growth is being financed by others.

Whitbread is very similar to IHG so if you understand one it is not difficult to understand the other. Whitbread owns Premier Inn, Costa Coffee, Beefeater Grill, Brewers Fayre,Taybarns and Table Table.

London Stock Exchange Plc (LSE)

You may not be aware that the London Stock Exchange itself if listed on the LSE. It turns out that the LSE is a company in its own right and its pretty profitable. The company makes its money by charging companies fees for maintaining a listing, charging admission fees, selling market data, owning the FTSE index and selling risk management services. In addition to the LSE the company also owns the Borsa Italiana, MTS, LCH Clearnet, Turquoise and AIM.

It should be obvious that the LSE is unlikely to go out of business and that there are huge barriers to entry that a competitor would have to overcome to compete effectively. Although there is one notable competitor namely ICAP's ISDX (formerly Plus Markets).

However, the earnings of the LSE tend to be highly cyclical; depending principally on trading volumes and the number of admissions. When stock market values fall the earnings of the LSE Group are likely to go down as the number of listings may reduce and the number of admission will likely be materially lower.

Imperial (IMT) and British American Tobacco (BATS)

Despite the government's best efforts and the advent of e-cigarettes the tobacco sector remains attractive as an investment. If you can look past or rationalize away the ethical considerations of tobacco investment you should take these shares very seriously.

Fundamentally the strength of tobacco companies comes down to very high barriers to entry. In other words there is probably never going to another major international tobacco company. There are four spaces (Imperial, British American, Phillip Morris and Japan International Tobacco) and they are all taken.

This is very important as the lack of competition gives big tobacco immense power as there are no new entrants coming in and pulling down prices. The very high margins (around 40%) and impressive return on equity achieved by tobacco companies is not being chipped away at by other companies. This is the essence of a durable competitive advantage.

Approaches to Valuation

Reproduction Value of Assets
Figure out how much it costs to reproduce the companies assets as a basis of valuation. Typically requires industry expertise.
Reproducing Tesco's property portfolio
Earnings Power Value
How much earning power do the assets of the company have?
Kone's installed base of equitment has a large earnings power value
Figure out if growth has any value and then apply a conservative and rational growth rate.
Coca Cola is likely to grow at least at the same rate as world GDP

Where the Profit Comes From

From the British Land annual report for 2013 we see:

Revenue: £384 M

Profit: £ 1,116 M

How can the profit exceed the revenue? The simple reason is that the majority of the profit being produced is due to the increase in value of British Land's assets. A small percentage increase in the value of an enormous leveraged property portfolio produces huge profits. The profits are not supported by cash flow and are only realised after the property is sold. This is why one year PE ratios are not a good valuation metric.This can also work in reverse causing large paper losses.

Your dividend is funded mainly through the cash flow produced by rent and also by the cash released by the sale of assets.

A Major London Developer

122 Leadenhall Street ("The Cheesegrater") is a major development involving British Land and is based on a design by Richard Rogers and his partners. This is the view from the Tait Modern.
122 Leadenhall Street ("The Cheesegrater") is a major development involving British Land and is based on a design by Richard Rogers and his partners. This is the view from the Tait Modern.

British Land (BLND)

The more cautions investors among us are likely to be drawn to property companies such as British Land. Personally I consider British Land to be a good and highly investable company but its not a magical safe haven stock. Although there are good economic reasons for investing in real assets such as property that's not a sufficient rationale for investment.

The first thing you need to know is that property is highly cyclical (i.e. goes up and down in value with economic cycles). This cyclicality is driven principally by the leverage cycle (accessibility of capital changes over time). Put simply; when finance is easily available property prices go up because more people can buy more property but when the money dries up it becomes harder to buy property which pushes the demand, and prices, down.

A basic check list for property investing could look something like this:

  1. Don't look at PE. Value on the basis of ongoing earnings and cash flow (see right).
  2. Ideally buy below book value (net assets) so you have a margin of safety. In other words if the company is liquidated you are likely to get a significant proportion of your money back.
  3. Ensure the company does not have too much debt. Check against loan convents and debt/EBITDA ratios (above, or likely to go above, 2.0 is cause for concern).
  4. Assess the quality of major tenants. For example Songbird Estates (owner of Canary Wharf plc) lost a lot of income after the bankruptcy of Lehman Brothers.
  5. Ideally the company should be structured as a REIT (Real Estate Investment Trust). If it is not a REIT and all other things are equal then the company should be consider to be worth less as the company will be less tax efficient.

Rolls Royce Holdings (RR.)

The first thing you must know about Rolls Royce is that they don’t make cars. The car business is owned by Volkswagen and it’s a terrible business which I would never recommend. It’s simply a differentiated product with many viable competitors and worst of all: it possess no competitive advantages.

However, Rolls Royce Holdings (i.e the power systems company) possess many competitive advantages and has a very strong business model. The two primary strengths are: high barriers to entry and a large base of installed equipment. I believe that both of these factors are likely to contribute to good long term returns for Rolls Royce shareholders.

You see, Rolls Royce has a large market share and few competitors. Currently Rolls Royce’s competition consists primarily of GE Aviation and United Technologies (Pratt & Whitney) along with some smaller specialist companies which tend to be owned by other engine manufacturers or do not compete directly with Rolls Royce’s core franchise. Furthermore, in order to become a viable competitor to Rolls Royce a new competitor would have to get a sufficient market share to overcome the fixed costs (principally R&D). To do this the new competitor would have to come up against Rolls Royce, United Technologies and General Electric. A potential fourth big engine manufacturer would probably have to lose a lot of money before becoming viable. GE, UTC and RR won't give up market share easily.

Another great attribute of Rolls Royce is its large base of installed equipment and long term service agreements (LTSA). This means that after RR sells an engine it can earn revenue from it for up to 30 years depending on the product lifecycle. Currently Rolls Royce has 13,000 engines in service in its civil aerospace business. The civil business generates around 72% of its revenue from these arrangements (see annual report, 2013). Every mile a RR engine does puts it a little closer to the time when the operator has to give RR more money.

How To Avoid Bad Investments

Make sure you avoid companies with the following attributes:

  • High debt
  • Profits translate into little cash flow
  • Low barriers to entry
  • Highly cyclical
  • Low dividend cover without a good reason (e.g. low reinvestment required, declining industry)
  • Does not buy back shares when it should
  • Buys back shares when it shouldn't (e.g. when they are very expensive)
  • Impossible to tell whether profit will increase in the long term
  • Highly vulnerable to changing technology
  • Management incentives are incorrect (e.g. paid to increase revenue in an industry that is not economically viable)

Stocks to Approach with Caution

The flip side of the best shares to invest in is, of course, the worst. Though I can’t say for certain that these are definitely the worst shares in the sense that they will produce bad returns, but what I can say is that you need to be very careful when you invest in these companies.

I would argue that the following companies are unable to generate high returns (typically due to low barriers to entry) or have high risk associated with them.

ARM Holdings (ARM)

The major issue that I have with this company is that it must compete with Intel (NADAQ: INTC). You may be aware that Intel has been a phenomenal long term investment. This is because Intel can vastly outspend its competitors in R&D and that it is highly disciplined about protecting its economic moat. This could translate into periods where ARM is operating at a competitive disadvantage.

Furthermore, being a tech business it must constantly reinvest to keep up; which constrains its ability to return cash to shareholders. It is also exceptionally difficult, if not impossible, to accurately forecast ARM’s future profits. Contrast this to Nestle where any idiot knows that in 10 years time Nestle will make more money than it does now.

The Airlines (IAG and EasyJet)

Although there are some valid arguments that suggest that the airline industry is improving due to consolidation I would still advise extreme caution.

The main problem is that airlines flat out fail the “little or no debt” test. Since the returns in the airline industry have been so low the only way to generate barely plausible returns is to leverage up. The leverage comes in the form of standard debt (bank debt, bonds, prefs etc) but also substantial future lease commitments. Be warned, airlines go bankrupt all the time.

Add to this the fact that the industry has relatively low barriers to entry and has intense competition you don’t have a recipe for high sustainable returns. It is no surprise that airlines have consistently failed to earn their cost of capital. Warren Buffett once said that an investor at Kitty Hawk would have been well advised to shoot the Wright Brothers down.


The very simple fact of note here is that TV is going to get a progressively smaller slice of the advertising pie over time. Its stared already. This is unavoidable as other forms of advertising are objectively more effective on a cost and conversion basis. As a result of the explosion in advertising space; TV channels have lost their pricing power. It’s unlikely to come back any time soon.

It’s also got to contend with the likes of YouTube and Netflix which are gaining popularity with the younger generation. In addition the cost of production certainly is not going to go down any time soon.

The problem I expect to see over the longer term is increasing costs and decreasing advertising revenue. Why you would invest in a business with these economics I don’t know.

Readers Opinion

Which of These Shares Do You Think Is the Best To Invest In?

See results

A Few Of My Favourites Outside the FTSE 100

  • Lancashire Holdings (LRE)
  • Catlin Group (CGL)
  • Novae Group (NVA)
  • Alliance Pharma (APH)
  • H&T Pawnbrokers (HAT)
  • Berkeley Group (BKG)
  • Close Brothers (CBG)
  • Spirax-Sarco (SPX)

A Slight Detour: AIM and the FTSE 250

I know that this article is about the best FTSE 100 shares but I can’t resist discussing a few of my other favourite shares. The reality is that the FTSE 100 is the most efficient of the investment spaces. It is rare that individual stocks in the FTSE become screaming bargains unless the entire market is a screaming bargain (e.g. in 2008). Whereas on AIM there are always screaming bargains. A good example of this was H&T Pawnbrokers (LSE: HAT) which was viable, had a great management team headed by a major shareholder (John Nichols), was rapidly cutting debt (which wasn't unreasonable to start with) and was trading at around 0.5 times book value. Another interesting example on AIM is Asian Citrus Holdings (ACHL) which, at the time of writing, is valued at less than the value of its cash in the bank, is viable and has no debt. What I'm trying to say is that enterprising investors should not focus on the FTSE 100 as the highest returns are found elsewhere.

Also, while I've got your attention I may as well tell you about my default stock tip. Currently, my favourite company listed on any stock exchange is Lancashire Holdings (LRE) which is in the FTSE 250. I am in general a big fan of insurers and reinsurers such as Catlin Group (CGL) and Amlin (AML) etc but Lancashire really stands out in this space. It’s also bang in the centre of my circle of competence.

However, the actual workings of Lancashire’s business is complex and will take too long to explain fully in this article. In short, Lancashire is a nimble and opportunistic underwriter that focuses on short tail insurance with significant reinsurance protection achieved through excess of loss contracts. I told you it was complicated. Put more simply, it only underwrites when the premium is good and is highly disciplined about protecting itself on the downside. I would strongly advise you to look into this company but be warned that it will take a lot of time to understand the business.

Did You Know?

The FTSE 100 actually has 101 constituents. This is because Royal Dutch Shell is listed twice as RDSA and RDSB.

What About Just Indexing? Buy Everything in the FTSE 100

This is an entirely valid strategy and is one that I would encourage you to seriously consider. Though the evidence that buying great businesses at attractive valuations results in out-performance is strong; this is not easy to do in practice. It is therefore sensible to consider simply indexing as most people who try to outperform will fail. It is a mathematical necessity that all investors when averaged together must be average. However, this is before fees. Interestingly, most investors are in fact bellow average after fees because they trade too much and have terrible timing (they get in when stocks have gone up and get out when stocks have gone down).

If you buy a low cost FTSE 100 index (e.g. Vanguard only charges around 0.1%) and you hold it for a long time while making regular additions to average out the highs and lows, you are likely to do well over time. Or at least be above average after fees whatever that average is.

© 2014 infostreamnetwork


    0 of 8192 characters used
    Post Comment

    No comments yet.


    This website uses cookies

    As a user in the EEA, your approval is needed on a few things. To provide a better website experience, uses cookies (and other similar technologies) and may collect, process, and share personal data. Please choose which areas of our service you consent to our doing so.

    For more information on managing or withdrawing consents and how we handle data, visit our Privacy Policy at:

    Show Details
    HubPages Device IDThis is used to identify particular browsers or devices when the access the service, and is used for security reasons.
    LoginThis is necessary to sign in to the HubPages Service.
    Google RecaptchaThis is used to prevent bots and spam. (Privacy Policy)
    AkismetThis is used to detect comment spam. (Privacy Policy)
    HubPages Google AnalyticsThis is used to provide data on traffic to our website, all personally identifyable data is anonymized. (Privacy Policy)
    HubPages Traffic PixelThis is used to collect data on traffic to articles and other pages on our site. Unless you are signed in to a HubPages account, all personally identifiable information is anonymized.
    Amazon Web ServicesThis is a cloud services platform that we used to host our service. (Privacy Policy)
    CloudflareThis is a cloud CDN service that we use to efficiently deliver files required for our service to operate such as javascript, cascading style sheets, images, and videos. (Privacy Policy)
    Google Hosted LibrariesJavascript software libraries such as jQuery are loaded at endpoints on the or domains, for performance and efficiency reasons. (Privacy Policy)
    Google Custom SearchThis is feature allows you to search the site. (Privacy Policy)
    Google MapsSome articles have Google Maps embedded in them. (Privacy Policy)
    Google ChartsThis is used to display charts and graphs on articles and the author center. (Privacy Policy)
    Google AdSense Host APIThis service allows you to sign up for or associate a Google AdSense account with HubPages, so that you can earn money from ads on your articles. No data is shared unless you engage with this feature. (Privacy Policy)
    Google YouTubeSome articles have YouTube videos embedded in them. (Privacy Policy)
    VimeoSome articles have Vimeo videos embedded in them. (Privacy Policy)
    PaypalThis is used for a registered author who enrolls in the HubPages Earnings program and requests to be paid via PayPal. No data is shared with Paypal unless you engage with this feature. (Privacy Policy)
    Facebook LoginYou can use this to streamline signing up for, or signing in to your Hubpages account. No data is shared with Facebook unless you engage with this feature. (Privacy Policy)
    MavenThis supports the Maven widget and search functionality. (Privacy Policy)
    Google AdSenseThis is an ad network. (Privacy Policy)
    Google DoubleClickGoogle provides ad serving technology and runs an ad network. (Privacy Policy)
    Index ExchangeThis is an ad network. (Privacy Policy)
    SovrnThis is an ad network. (Privacy Policy)
    Facebook AdsThis is an ad network. (Privacy Policy)
    Amazon Unified Ad MarketplaceThis is an ad network. (Privacy Policy)
    AppNexusThis is an ad network. (Privacy Policy)
    OpenxThis is an ad network. (Privacy Policy)
    Rubicon ProjectThis is an ad network. (Privacy Policy)
    TripleLiftThis is an ad network. (Privacy Policy)
    Say MediaWe partner with Say Media to deliver ad campaigns on our sites. (Privacy Policy)
    Remarketing PixelsWe may use remarketing pixels from advertising networks such as Google AdWords, Bing Ads, and Facebook in order to advertise the HubPages Service to people that have visited our sites.
    Conversion Tracking PixelsWe may use conversion tracking pixels from advertising networks such as Google AdWords, Bing Ads, and Facebook in order to identify when an advertisement has successfully resulted in the desired action, such as signing up for the HubPages Service or publishing an article on the HubPages Service.
    Author Google AnalyticsThis is used to provide traffic data and reports to the authors of articles on the HubPages Service. (Privacy Policy)
    ComscoreComScore is a media measurement and analytics company providing marketing data and analytics to enterprises, media and advertising agencies, and publishers. Non-consent will result in ComScore only processing obfuscated personal data. (Privacy Policy)
    Amazon Tracking PixelSome articles display amazon products as part of the Amazon Affiliate program, this pixel provides traffic statistics for those products (Privacy Policy)