3 ASX shares to buy before Xmas (hint: one predicted to rise 41%)

With the S&P/ASX 200 Index (ASX: XJO) down more than 1% in the past month, there are some bargains out there as Santa once again prepares for his epic international package delivery gig.

Two experts this week named 3 ASX shares that they think are ready to rally.

Some sectors have been hit harder than others in recent weeks, so it’s no wonder one of the picks is projected to rocket up 41%.

Insurance ASX share with ‘pricing tailwinds’

Shares for QBE Insurance Group Ltd (ASX: QBE) have fallen about 7% since its mid-August peak.

Morgans investment advisor Jabin Hallihan still likes the look of the insurance giant though.

“QBE has increased insurance rates over the past year, which is likely to increase margins and underlying profit into 2022,” he told TheBull.

“Pricing tailwinds are evident.”

QBE shares closed Tuesday at $11.67, up 0.86%.

The dip in price over the past few months has now made QBE shares historically cheap.

“The stock is relatively inexpensive as it was recently trading on a forecast price/earnings multiple of 12.8 times for fiscal year 2022.”

Morgans has a price target of $13.70 for QBE, along with a juicy dividend yield of 4.2%.

Retailer with ‘brighter’ outlook

After an up-and-down year, Harvey Norman Holdings Limited (ASX: HVN) shares are currently up 6.6% for the year.

Burman Invest chief investment officer Julia Lee reckons the retail giant will leave its COVID-19 troubles behind as it heads into 2022.

“The retail giant sells big ticket items that shoppers want to see before buying,” she said.

“The outlook is brighter now that News South Wales and Victoria have emerged from lockdowns.”

Australian households have plenty of money saved up from staying home the past 18 months, which bodes well for Harvey Norman.

“Increased household savings is positive for Harvey Norman during the crucial Christmas shopping period. Internationally, all regions except Malaysia are generating growth.”

The Harvey Norman share price ended Tuesday at $5.06, down 1.56%.

‘Compelling valuation’: ASX share set to rise 41%

Major bank shares have had a terrible time the past few weeks.

Westpac Banking Corp (ASX: WBC) is no different, seeing its stock price fall more than 20% since late October.

But it’s the favourite among the big four, as far as Morgans is concerned.

“We believe WBC offers the most compelling valuation of the major banks,” said Hallihan.

“Our 12-month price target is $29.50 and we’re forecasting a dividend yield of 6.3 per cent.”

That target is a stunning 41% above the Tuesday afternoon price of $20.94.

Hallihan reckons Westpac has a significant advantage above the other 3 big banks.

“We prefer Westpac to the other major banks because it’s positioned relatively defensively due to its loan book skewed more towards Australian home lending,” he said. 

“The recently announced off market buyback is positive for shareholders, and is earnings accretive.”

The post 3 ASX shares to buy before Xmas (hint: one predicted to rise 41%) appeared first on The Motley Fool Australia.

More reading

• 5 things to watch on the ASX 200 on Wednesday
• Is it a buy? Leading brokers analyse the Westpac (ASX:WBC) share price
• Could Harvey Norman (ASX:HVN) shares be a Christmas cracker of a buy?
• Could the CBA share price peak have been and gone?
• Goldman Sachs names 2 ASX 200 shares to buy

Motley Fool contributor Tony Yoo has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia owns and has recommended Harvey Norman Holdings Ltd. The Motley Fool Australia has recommended Westpac Banking Corporation. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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