Shares in home retail giant Harvey Norman Holdings Limited (ASX: HVN) are inching higher this morning and now trade less than 1% higher at $5.13 apiece.
With the Christmas holidays are looming around the corner, many of us are still scurrying to organise last minute gift ideas, all whilst trying to wind down for some hard-earned "R&R".
The markets are feeling the generosity this festive season as well, with the major benchmarks each bouncing off 2-month lows and closing out the past 5 trading days in the green.
With that in mind, it makes sense that investors are searching for some Christmas bargains, and so we delve into the expert commentary to see if Harvey Norman is a good "stock-ing" filler (see what I did there?).
Is Harvey Norman a buy this Christmas?
According to portfolio manager at Market Matters, James Gerrish, yes Harvey Norman its a buy. Speaking to Livewire Markets very recently, Gerrish notes that the big secular tailwind for Harvey Norman – and the wider retail sector – is the high rates of household savings in Australia.
Gerrish says there are $300 billion in pent up household savings that Aussies have accumulated since the onset of the pandemic.
That's a total of 14% of GDP, a "wall of money" as the portfolio manager puts it. These factors mean Harvey Norman is well-positioned to capitalise on the potential spending of said savings, given its retail focus.
Not only that, but Harvey Norman is trading at valuations cheaper than rival JB Hi-Fi Limited (ASX:JBH), a punishment that Gerrish feels is unwarranted at this stage.
Contrasting this opinion is portfolio manager at Tribeca Investment Partners, Jun Bei Liu, who notes the drawn-out impacts on the Australian retail sector from COVID-19 lockdowns in the same interview with Livewire.
Not only that, but Jun Bei Liu alluded to supply chain and manufacturing bottlenecks that have been spurred on by the pandemic as well, meaning "you can't get product here and you can't sell properly".
However, the portfolio manager notes that Harvey Norman sits in "neutral territory" for Tribeca and she believes the company is "well on track to deliver more capital returns post the first-half results".
Finally, the team at Goldman Sachs also agree that Harvey Norman could be a buy coming into Christmas, and value the company at $6 per share.
It too feels the company could benefit from an uplift in consumer spending over the Christmas break, backed by the enormous savings pool Australian's have accumulated these past 2 years.
It maintains its buy rating on the shares and notes that it expects spending to increase for the home category in retail, a direct benefit to Harvey Norman's earnings.
So with that in mind, it appears that Harvey Norman could be the beneficiary of a huge wave of spending this Christmas if Australian's decide to dip into that mammoth cash stockpile.
Time will tell if the thesis plays out, especially with the emergence of the new Omicron COVID-19 variant.
Harvey Norman share price summary
In the past 12 months, the Harvey Norman share price has gained almost 11% after rallying more than 9% this year to date.
Despite this, it has just outpaced the benchmark S&P/ASX 200 Index (ASX: XJO)'s return of approximately 10% in the past year.
