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3 wise gifts to stock up on in 2022

·3-min read
A cartoon Santa riding on his sleigh on a background of a line graph showing price increases.
'Reopening' trade stocks, such as Qantas, are expected to take off in 2022. (Source: Getty)

If you celebrate Christmas with gift giving, the best gift you can give is the one that keeps on giving.

There are stocks you could easily give someone else - or even yourself - that might not instantly give but, over time, they will.

Legendary US investor Warren Buffett advised us to be “greedy when others are fearful”.

The arrival of the Omicron variant of the coronavirus has the stock market selling off stocks that will do well when the pandemic threat disappears. Therefore I like the idea of buying today for a decent return over 2022.

Gift 1: Qantas

Most economists tip 2022 to be a boom economic-growth year and that should pump up profits and help share prices.

So I want to buy ‘reopening’ trade stocks, and that’s why I like Qantas.

The expert analysts, who spend their time working out future share prices for big financial institutions and brokerages, expect a 22.6 per cent gain for the flying kangaroo but the team at Morgan Stanley say it could be a whopping 42.86 per cent.

This chart shows Qantas's share price has room to the upside:

A graph showing movements in the Qantas share price since 2017.
(Source: Supplied)

Gift 2: Webjet

While I’m on travel plays, I reckon Webjet will fly high when we all start travelling and booking hotel rooms again.

Along with Webjet, the company has WebBeds, which operates one of the biggest hotel room booking businesses in the world.

I interviewed Webjet’s managing director, John Gusic, recently. He said COVID had made his team cut costs, so when revenue and customers returned, profits would take off.

The expert company analysts think Webjet could go up 16.2 per cent, but Ord Minnett is very enthusiastic, with a 38 per cent upside prediction for this Australian company success story.

Gift 3: BHP

And now for something entirely different, my third Christmas stock is BHP.

The analysts think the ‘Big Australian’ has a 6.1 per cent upside ahead for its share price. However, Macquarie is very enthusiastic, with nearly a 26 per cent rise expected.

Economists and market pundits expect commodity prices to do well with the boom economic year ahead, and companies such as BHP are natural beneficiaries.

But there’s a surprise pay-off with this company, with a forecast dividend expected to be 10 per cent.

Mining companies aren’t known as dividend-givers forever and they’ve never given like they have in recent times.

But most experts believe there’s probably two more good years ahead for dividends, though they will be a bit less in 2023.

Surprise gift: Megaport

My final stock tip for Christmas is an interesting tech stock called Megaport.

It was the tip from Eleanor Swanson, the hotshot fund manager from Firetrail Investments, who was asked to give her tip for the year at the prestigious Sohn Hearts & Minds conference recently.

This is a company that gives businesses website grunt when they have occasional or even frequent needs for more internet firepower.

When I interviewed Bevan Slattery, the founder of Megaport, he gave me an example of how the company helped other businesses.

He said when the Victorian Racing Club puts on its Melbourne Cup week, the traffic to its website is huge, so the racing club buys extra capacity from Megaport.

Since the pandemic, the world has become more committed to buying and doing everything online so, a company like Megaport can be a tech business that gives to its shareholders for a really long time.

This chart of Megaport's share price shows this is a company on the way up:

A graph showing movements in the Megaport share price since 2017.
(Source: Supplied)

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