Top ASX shares to buy before Christmas
The festive playlist is under construction, last-minute shopping is in full swing, and Mariah Carey's royalties are pouring in. In the warm, cozy tone of Michael Bublé, "It's beginning to look a lot like Christmas".
Why not add to the festive cheer and fill those Christmas stockings with some top-notch ASX shares?
It's a busy time of year, and nurturing our financial future can slip down the list of priorities. That might explain why 'improving finances' is one of the most common New Year's resolutions. Unfortunately, research suggests that only 9% of resolutions are kept, so it might be worthwhile laying the groundwork before the silly season really sinks in.
In the spirit of giving, we asked our writers to rummage around for their top shares. Here's what they pulled from Santa's sack this Christmas.
Consider it our Foolish gift to you.
5 awesome ASX shares to pop in your investment stocking (smallest to largest)
- Megaport Ltd (ASX: MP1), $1.23 billion
- Charter Hall Long WALE REIT (ASX: CLW), $2.65 billion
- Super Retail Group Ltd (ASX: SUL), $3.33 billion
- Life360 Inc (ASX: 360), $5.23 billion
- JB Hi-Fi Ltd (ASX: JBH), $10.39 billion
(Market capitalisations as of market close 13 December 2024)
Why our Fool writers love these ASX stocks
Megaport Ltd
What it does: Megaport provides a range of network-as-a-service solutions. In basic terms, a business can use Megaport's products to easily deploy, scale up or down, and switch off their cloud-based needs as they need it.
By Mitchell Lawler: Data is quickly becoming an integral piece of every business. Whether it's serving content at lightning speed via an app, rendering animations using cloud computing, or collaborating across the world using a private network, the need for flexible networks is growing.
Megaport is sort of like a car rental for your network. You wouldn't buy a car just for a week's holiday in Japan; you'd hire one out. It's only logical the same method is now being applied to networking.
Then it becomes important which car rental business has the most locations worldwide so you know you're covered no matter where you travel. Again, the networking game is no different. That's why it's a competitive advantage that Megaport possesses the largest software defined network in the world, connecting to more than 930 data centres across 26 countries.
By my estimates, Megaport trades on a relatively undemanding valuation compared to its growth potential. On that basis, I think this company could be the gift that keeps on giving this Christmas.
Motley Fool contributor Mitchell Lawler does not own shares of Megaport Ltd.
Charter Hall Long WALE REIT
What it does: Charter Hall Long WALE is a real estate investment trust (REIT) that owns a portfolio of commercial properties around Australia.
By Tristan Harrison: The Reserve Bank of Australia (RBA) has finally stated it's seeing some progress on inflation in Australia. This suggests interest rate cuts may well happen in the first half of 2025 or even the first quarter. It will depend on how the economic data unfolds between now and February 2025.
High interest rates have been a key headwind for REITs over the past two or three years due to the higher cost of debt and the downward pressure they put on asset prices. So, if rates are cut next year, REITs could be one of the sectors that benefit most.
I like the diversification this ASX share's portfolio provides – its properties are spread across pubs and bottle shops, government-tenanted offices, telecommunication exchanges, service stations, grocery and distribution centres, food manufacturing, waste and recycling, retail, banking, defence, and more.
The REIT's tenants are signed on for long-term contracts, and the ASX share has a weighted average lease expiry (WALE) of more than 10 years, which implies appealing income security. It's expecting to pay a distribution yield of 6.6% in FY25.
The valuation also seems attractive. As of 30 June 2024, it was trading at a 19% discount to its net tangible assets (NTA), which I think is a pleasing discount.
Motley Fool contributor Tristan Harrison does not own units of the Charter Hall Long WALE REIT.
Super Retail Group Ltd
What it does: Super Retail Group is, as its name implies, a company that owns and operates a group of some of Australia's best retailers. These include Super Cheap Auto, Rebel, Macpac, and BCF.
By Sebastian Bowen: Like JB Hi-Fi, Super Retail might be a company you have visited (or will visit for those last-minute shoppers!) for a spot of gift shopping this Christmas time. Its chains are all leading providers of the specialty goods they sell. Anyone who works on cars is probably a frequent customer of Super Cheap Auto, for example. As outdoor enthusiasts would be over at BCF and Macpac.
Like almost all retailers, Super Retail has been hurt by the tight, inflation-ridden Australian economy in 2024. An October trading update warned shareholders that cost of living issues are weighing on the company's short-term outlook.
However, I think this company's long-term fundamentals remain sound, which should mean that Super Retal's fortunes should recover when the economy eventually picks up steam. As such, the current share price of $14.76 looks attractive to me. The hefty (and fully franked) dividend yield of 4.67% doesn't hurt either.
Motley Fool contributor Sebastian Bowen does not own shares of Super Retail Group Ltd or JB Hi-Fi Ltd.
Life360 Inc
What it does: Life360 describes itself as a family connection and safety company. It keeps people close to the ones they love with its category-leading mobile app and Tile tracking devices. At the last count, the company's app had a massive 76.9 million monthly active users (MAU).
By James Mickleboro: I think a recent pullback in the Life360 share price is an early Christmas present for Aussie investors. Although its shares have tripled in value this year, I don't believe this is a case of irrational exuberance. I think it was a case of an extremely high-quality company being severely undervalued by the market a year ago and receiving a justified re-rating.
And given its very positive long-term growth outlook as it monetises its huge MAU and starts generating meaningful revenue from its new advertising business, I think Life360 shares can continue to deliver strong returns for investors in the coming years.
The team at Bell Potter believes that this will be the case. The broker recently put a buy rating and $26.75 price target on Life360 shares. It believes "there is the potential for the paying subscriber base to triple from here."
Motley Fool contributor James Mickleboro owns shares of Life360 Inc.
JB Hi-Fi Ltd
What it does: JB Hi-Fi sells home entertainment and home appliance products. The iconic Aussie retailer focuses on consumer electronics, electrical goods, and white goods through its JB Hi-Fi, JB Hi-Fi Home and The Good Guys stores.
By Bernd Struben: With Christmas around the corner, why not own part of a company where you, or your friends, are likely to be splurging on holiday gifts?
Yes, JB Hi-Fi shares have already surged 89% since this time last year. But I believe the stock can keep outperforming in 2025.
For the three months to 30 September, the company achieved total year-on-year sales growth of 4.9% for JB HI-FI Australia, 19.6% for JB Hi-Fi New Zealand, and 5.3% for The Good Guys.
With wage growth in Australia now outpacing inflation and tax cuts putting real money back into consumers' pockets, I believe the company can keep boosting those sales in the year ahead. And if the RBA begins to dial back interest rates next year, which looks very likely, that should offer some added tailwinds.
On the balance sheet, JB Hi-Fi held net cash of $302.7 million on 30 June.
The stock also trades on a 3.6% fully franked trailing dividend yield.
Motley Fool contributor Bernd Struben does not own shares of JB Hi-Fi Ltd.
The post Top ASX shares to buy before Christmas appeared first on The Motley Fool Australia.
The Motley Fool Australia's parent company Motley Fool Holdings Inc. has positions in and has recommended Life360, Megaport, and Super Retail Group. The Motley Fool Australia has positions in and has recommended Super Retail Group. The Motley Fool Australia has recommended Jb Hi-Fi. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.
The Motley Fool's purpose is to help the world invest, better. Click here now for your free subscription to Take Stock, The Motley Fool's free investing newsletter. Packed with stock ideas and investing advice, it is essential reading for anyone looking to build and grow their wealth in the years ahead. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson. 2024