The 3 best deals on the ASX today

The Reserve Bank did its bit to wish Aussies a merry Christmas. So which stocks are the most suited to take advantage of the jolly spirit?

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Thankfully the Reserve Bank of Australia decided to give Australians a Christmas present by leaving interest rates well alone this week.

eToro market analyst Josh Gilbert reckons governor Michele Bullock's stance has softened somewhat since she started in the hot seat in September.

"I expected to see a slightly tougher tone than we got, but it was somewhat dovish, pointing towards progress on inflation and a peak in weak growth," he said.

"For now, the market may view last month's hike as insurance, as [Tuesday's] pause and statement signal good news for the end of this cycle."

So while we head into the festive season with optimism, what are the best deals seen on the ASX at the moment?

55% up over the last 6 weeks? Yes, please

The hottest stock on the S&P/ASX 200 Index (ASX: XJO) right now is Neuren Pharmaceuticals Ltd (ASX: NEU).

The shares have rocketed almost 55% over the past six weeks as investors step over each for a piece of the action.

The analysts at Elvest Fund are backing it for further growth.

"With cash reserves of $230 million, a steady stream of high margin royalty income and a promising pipeline of 'orphan drug' designated therapies, Neuren is swiftly emerging as a high quality ASX-listed pharmaceutical," they said in a memo to clients this week.

Although not widely covered, the $2 billion company is unanimously supported in the professional community. According to CMC Invest, all five surveyed analysts recommend Neuren Pharmaceuticals as a buy.

Winner winner chicken dinner

Going from healthcare to perhaps the opposite is Collins Foods Ltd (ASX: CKF).

The operator of Kentucky Fried Chicken restaurants in Australia and Europe is winning over many investors in 2023.

A bit like Neuren Pharmaceuticals, the stock price has shot up more than 25% since the end of October.

The experts at Celeste Funds Management like how Collins Foods is cutting costs and growing sales at the same time.

"All divisions grew sales, with Australia same-store sales growth (SSSg) of 6.6% and Europe SSSg of 8.8% respectively," they said in their memo to clients.

"Effective cost containment saw group EBITDA margins expand 87 basis points vs 2h23 with each division reporting margin expansion."

Collins Foods shares have rocketed in excess of 60% year to date, but the Celeste analysts feel like there is plenty more to come.

"With a strong brand, continued execution by management will support double-digit earnings growth over the medium to long-term."

One of the best deals that the market hasn't woken up to yet 

Also on the way up is budget fashion accessories retailer Lovisa Holdings Ltd (ASX: LOV).

After spending much of 2023 in the doldrums, Lovisa shares have poked their heads up almost 12% over the past 10 days or so.

DNR Capital portfolio manager Sam Twidale said in a video that it's a great time to pick up consumer discretionary stocks on the cheap.

"Now is a great opportunity to buy these high-quality businesses at much lower valuations because of concerns around consumer spending in the short term.

"A company in this sector that we like is Lovisa."

His team was fortunate enough to buy Lovisa shares five years ago, to enjoy a 176% return over that period.

Twidale reckons many investors are too distracted by the short-term conditions.

"The market is focusing on the short-term metrics like sales growth and impact of weaker consumer spending but is missing the bigger picture opportunity of ongoing store expansion as it continues to diversify internationally."

Motley Fool contributor Tony Yoo has positions in Lovisa. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has positions in and has recommended Lovisa. The Motley Fool Australia has recommended Collins Foods and Lovisa. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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