It might sound like a cliche, but the world really has been in a strange place in recent times.
In Australia, as an example, consumers and businesses have endured 12 interest rate rises in 14 months. Yet somehow unemployment is still at historical lows.
This is not just a problem for central banks that are trying to tame inflation. It also triggers much bemusement among investors.
Right now, the economic uncertainty is making it very difficult to work out which ASX shares may provide positive returns over the coming period.
Thankfully, experts who have far more time to research such matters can provide some guidance:
The ASX sector ready to rocket
Wilson Asset Management senior equity analyst Shaun Weick, in a memo to clients, this week revealed a significant pivot for his fund.
"Over the past few months, the WAM Capital Limited (ASX: WAM) investment portfolio has been slowly increasing its weighting to companies exposed to the consumer.
"It is our view that the 2024 financial year will represent a bottoming of earnings, with growth set to recommence from 2025."
Weick explicitly named Harvey Norman Holdings Limited (ASX: HVN), Lifestyle Communities Ltd (ASX: LIC), and oOh!Media Ltd (ASX: OML) as examples of businesses that have "future potential earnings upgrades" ahead of them.
Why this consumer stock is so cheap at the moment
Weick cited department store Harvey Norman as "the best example" of a company that will benefit from improving consumer sentiment.
And right now, after dropping 13.3% over the past year, the shares can be picked up for dirt cheap.
"Harvey Norman has an extensive property portfolio that underpins its net tangible assets (NTA) of $4.9 billion, which is slightly higher than its current market capitalisation of $4.7 billion," said Weick.
"This means investors can currently access Harvey Norman's extensive retailing business, which is set to generate approximately $670 million of profit before tax in the 2023 financial year, at an attractive discount."
To demonstrate how rare this opportunity is, he pointed out how there have only been two other times over the past 15 years when the Harvey Norman share price has traded at such a discount to its assets.
"[They were] the growth of e-commerce in 2012 and 2013, and when the pandemic impacted the market in 2020."
Oddly, the majority of analyst forecasts show earnings per store to be lower in 2025 than in 2019.
"We believe that the current environment is more favourable than 2019 and for these reasons we are confident on the potential for future upgrades to 2025 earnings expectations."
