3 ASX finance shares to buy right now (hint: no big banks)

Forget the big four, here is a trio of financial stocks that could benefit from the post-COVID economic tailwinds.

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With economic activity roaring in the post-COVID era and real estate prices running hot, it's a great time to be in finance at the moment.

So it's not a long bow to draw to suggest ASX shares in that industry have some optimism.

Sure, the big banks have hogged the limelight in recent months with their massive dividends and share buybacks.

But here are 3 smaller players that experts picked this week as a "buy", which might have more room for growth:

These ASX shares are about to reverse their fortunes

Shares for Australian Finance Group Ltd (ASX: AFG) have disappointed this year, sinking more than 4%.

However, Marcus Today portfolio manager Thomas Wegner told TheBull that its business is actually expanding.

"This mortgage broking group lodged $24.1 billion in home loans in the first 3 months of financial year 2022 — a 33% increase on last year's prior corresponding period."

And as interest rates inevitably rise from the current historic low, it'll only spur on AFG's activities.

"We expect earnings growth in the near term to be supported by an underlying shift to higher-margin products," he said.

"As interest rates start to rise, the role of a mortgage broker will become more important to borrowers."

AFG shares dived 1.9% lower on Wednesday, to close at $2.58.

A classic 'buy the dip'

The share price for Queensland business Suncorp Group Ltd (ASX: SUN) has taken a beating recently, losing 15% since mid-October.

Catapult Wealth portfolio manager Tim Haselum attributed the plunge to "an increase in natural disaster costs due to storms on the east coast".

But that's now provided a golden buying opportunity.

"Historically, Suncorp is at a point in the claims and premium increase cycle where investors can consider taking advantage of share price weakness," he said.

"Offsetting higher costs are rising premiums and bond yields, which should lead to an increase in earnings in the absence of significantly more claims."

JP Morgan agrees with Haselum, setting a price target of $13.30, as opposed to Wednesday's closing price of $10.85.

2022 could be as great as 2021 for this ASX share

Pure insurance player QBE Insurance Group Ltd (ASX: QBE) has seen its shares rise more than 42% this year so far.

Fat Prophets chief executive Angus Geddes reckons it still has plenty of legs.

"This insurer has made substantial improvements to its business in recent years," he said.

"Narrowing its focus has simplified the business and led to improving underwriting outcomes."

The analysts at Morgans are in sync with Geddes, also rating the insurance giant as a "buy" with a price target of $13.70. That compares to the Wednesday closing price of $12.19.

Rising interest rates will benefit QBE, according to Geddes.

"The business should be a major beneficiary ahead of a steepening yield curve," he said.

"The insurance pricing market has become more rational, and QBE's premiums have firmed considerably, which should continue, in our view."

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 has no position in any of the stocks mentioned. 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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