Some of the country's top fund managers have revealed some great ASX share picks for 2021.
There was a huge amount of disruption in 2020 due to the COVID-19 pandemic.
These businesses have been identified by fundies as among the best opportunities:
Corporate Travel Management Ltd (ASX: CTD)
Olivia Salmon from fund manager outfit Lennox Capital picked Corporate Travel Management. According to the ASX, it has a market capitalisation of $2.3 billion.
Corporate Travel Management describes itself as a global leader in business travel management services. It says it drives savings, efficiency and safety to businesses and their travellers all around the world. The company claims that for every dollar spent on its travel management services, the company will return more to the client in savings. It does this with global buying power, it shows the cheapest time to travel and the most effective travel policies. It also has a focus on efficiencies across the process.
Ms Salmon said that Corporate Travel Management was Lennox Capital's number one ASX share pick for the re-opening trade when the fund manager became bullish on shares again.
The fundie believes that the market's fears that Zoom calls or phone calls will be the way of the future and no-one will travel anymore, is overblown.
It's Ms Salmon's opinion that business travel will probably be the first to rebound and this is a central part of the business. She said that business people need to go out, meet companies, kick the tyres and press the flesh with people.
The fundie thinks as soon as people feel safe enough to start flying again, that pent up demand they've had for the last year will come through in business travel.
In FY20 Corporate Travel generated $65 million of underlying earnings before interest, tax, depreciation and amortisation (EBITDA) and underlying net profit of $32 million before one-off items. The statutory result from the ASX share was a loss of $8.2 million.
A couple of months ago the ASX share announced that it was acquiring Travel & Transport, a North American corporate travel business – in the 2019 calendar year this business generated total transaction value (TTV) of $4 billion.
According to Commsec, the Corporate Travel Management share price is valued at 19x FY23's estimated earnings.
Primewest Group Ltd (ASX: PWG)
David Allingham from fund manager Eley Griffiths Group picked Primewest as the ASX share pick of 2021.
Primewest operates in the real estate funds management sector. The ASX share says this involves sourcing, acquiring, managing and disposing of real estate assets on behalf of investors. Real estate funds management is attractive to private high-net-worth and institutional investors because it allows these investors to acquire an interest in larger assets or diversify their investment exposure, which might not be possible if an investor invested directly.
Mr Allingham said Primewest is off the radar, under-researched, under-covered and illiquid. Around 80% of the issued capital is still owned by its founders, the fundie said that the founders are entrepreneurial with vast property experience.
Eley Griffiths is attracted to how Primewest has grown its funds under management (FUM) from $2 billion up to about $5 billion in the last couple of years. The fundie said that the ASX share has grown very strongly and can keep aggressively growing in time.
Mr Allingham also said that it has $50 million of net cash on the balance sheet, so it's very conservatively geared. He also said he sees "very little downside risk in the stock at this price around the $1.15-$1.20 level. This stock was trading a $1.40 prior to the COVID-19 crisis. We think this company has a very long runway for growth, and with very little downside risk. We really like this stock and it is the largest position in our emerging companies fund."
