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Why I think WAM Global Limited (ASX:WGB) looks like a good buy today

I think that WAM Global Limited (ASX: WGB) looks like a good buy today.

As a reminder, WAM Global is a listed investment company (LIC) operated by LIC specialists Wilson Asset Management.

It’s unique compared to the other LICs it operates like WAM Capital Limited (ASX: WAM) because WAM Global focuses on overseas shares whilst all the other ones invest on the ASX.

However, it does use the same strategy of investing in undervalued growth shares where the investment team can see a catalyst to improve the valuation. Its target is small and mid-caps, although the definition of a small cap on the ASX is different to international shares.

Some of its current top holdings include American Express, Diageo, Hasbro, HCA Healthcare, Logitech and Scout24. These would all be very large businesses on the ASX.

One of the main reasons why I believe that WAM Global would be a good buy today is that it’s now trading at a small discount to its underlying assets. At the end of October 2018, it reported it had pre-tax net tangible assets (NTA) per share of $2.13, compared to the current share price of $2.08 – a 2.5% discount. Most of the other WAM LICs trade at premiums.

I believe that most Australian investors have far too much of their portfolio invested in ASX shares. Whilst I think there are a lot of quality shares on the ASX it only represents around 2% of the opportunities of the global share market.

There are going to be some good opportunities in the rest of the 98% of the global share market. Indeed, many of those non-ASX shares are trading at better value because there’s a lot of money in Australia looking for a home, sending valuations higher than normal.

Foolish takeaway

If WAM Global wasn’t already one of my larger positions I would definitely consider buying some shares at today’s price, it’s at a more attractive price than the initial offering price of $2.20. Over the long-term it could become one of the best LICs on the market once it starts paying a dividend.

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Motley Fool contributor Tristan Harrison owns shares of WAMGLOBAL FPO. The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. 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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