The ASX share market is offering a wide range of opportunities in my opinion. With the current low starting point for a lot of valuations, this could be a very opportunistic time to buy.
Interest rates and inflation have thrown up plenty of uncertainty, but I believe that when there is fear, it's the best time to buy.
Which ASX shares could be excellent investments from now to the end of 2023? I think these names could provide returns good enough to put under the Christmas tree.
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Adairs Ltd (ASX: ADH)
Adairs is a leading homewares and furniture business. It has plans to grow its number of stores across the Adairs and Focus on Furniture brands, increase the size of some Adairs stores, grow its membership base, become more efficient, and provide a strong online shopping experience. I also like the plan to start selling Mocka furniture in stores.
I'm particularly attracted to the low valuation and high dividend yield. According to CommSec, the Adairs share price of $2.20 is valued at under 8x FY23's estimated earnings with a projected grossed-up dividend yield of 12.1%.
Airtasker Ltd (ASX: ART)
Airtasker operates a leading platform that enables people to advertise for and pay for tasks that need doing such as furniture assembly, photography, delivery, accounting, and a very wide range of other services. Individuals and businesses can offer to do that work.
The ASX share is growing its organic revenue at a good double-digit growth rate overall. But, I'm incredibly optimistic about what the business can achieve in both the United States and the United Kingdom. They are both very large markets.
With a gross profit margin of above 90%, it can reinvest a high percentage of its new revenue for growth.
At the Airtasker share price of 33 cents, I think the company has plenty of upside potential.
Brickworks Limited (ASX: BKW)
I think it's worth looking at this diversified ASX share amid the heightened uncertainty about the real estate sector. The fact that it's going to start exporting bricks to the UK market is also promising.
In my opinion, the asset backing of the business is particularly compelling. I like the prospects for the industrial property trust joint venture as it completes more of its large property projects.
At the current Brickworks share price of $22.42, I think there is a big discount to its underlying inferred asset backing.
GQG Partners Inc (ASX: GQG)
GQG Partners is a US-based fund manager, though it is looking to expand geographically into places like Australia.
The ASX share has faced headwinds in 2022 with share markets going down, hurting its funds under management (FUM) and ability to generate profit. However, FUM continues to perform well, with ongoing FUM inflows. A share market recovery could be a useful tailwind next year for the FUM.
At the current GQG share price of $1.37, it could pay a dividend yield of 8.6% in FY23 according to CommSec.
VanEck Morningstar Wide Moat ETF (ASX: MOAT)
This exchange-traded fund (ETF) is about investing in US shares that are expected to see their strong competitive advantages endure for at least a decade and perhaps more than two decades.
The quality share is only added to this portfolio if it is deemed to be trading at an attractive value compared to Morningstar's estimate of fair value.
I think this combination of factors could help the ETF perform well in 2023 and beyond.
Pinnacle Investment Management Group Ltd (ASX: PNI)
This is another ASX share that is linked to funds management. It is invested in an array of quality fund managers – they have also seen some difficulties during this period of volatility. However, I think a turnaround for share markets could be a good tailwind for FUM and earnings.
I like that the business is looking to continue to expand its portfolio. It has expanded into Canada, which is a compelling market and similar to Australia.
After a 45% drop in the Pinnacle share price to $8.73, I think it now looks much better value.
Temple & Webster Group Ltd (ASX: TPW)
Temple & Webster is the leading online-only retailer of furniture and homewares in Australia. It sells products by third-party suppliers as well as a growing range of private label products.
After a period of tough comparable periods due to COVID-19 lockdowns (and strong online demand from customers), the business is expecting to get back to double-digit revenue growth by the end of FY23. I like the company's plans to invest in various initiatives, like AI (artificial intelligence) and augmented reality (AR), which can help it offer customers a better service and achieve better profitability.
However, after a 60% fall in the Temple & Webster share price in 2022 to $4.30, I think it looks excellent value for the long term.
Volpara Health Technologies Ltd (ASX: VHT)
Volpara is a small but growing ASX healthcare share that specialises in providing breast screening technology and risk analysis for patients, as well as software for medical professionals. It's also involved in screening for lung cancer.
The business is growing its market share and aims to keep increasing its average revenue per user (ARPU). It's aiming to rapidly reach breakeven, and I think it can do well with this goal because it has a very high gross profit margin of over 90%.
I think the ASX share looks much better value after dropping 49% in the year to date to 54 cents.
Wesfarmers Ltd (ASX: WES)
Wesfarmers is one of the best blue chips in my opinion. Its crown jewel business, Bunnings, has a very strong market position and earns a high return on capital. The company's moves to expand into new areas including healthcare and lithium seem smart, considering the long-term growth potential of those two sectors thanks to ageing demographics and demand for electric vehicles, respectively.
I believe the retail outlook won't always look this uncertain, so I think the 23% drop in the Wesfarmers share price to $46.24 looks very compelling for the long term.
Xero Limited (ASX: XRO)
This ASX tech share offers high-quality software for accountants, bookkeepers, financial advisors and business owners. It can be used anywhere in the world because its platform is cloud-based.
It's growing its total number of subscribers and ARPU. Xero also recently increased its prices for New Zealand, the UK and Australia, which could boost the business' economics further.
With a gross profit margin approaching 90% and ongoing strong revenue growth, I think the business can achieve strong profit growth in the coming years. With the Xero share price down over 50% in 2022 to $71.08, I think it looks very compelling for the rest of this decade.
