Respected fund manager Wilson Asset Management (WAM) has recently identified a few ASX shares that it owns across its various funds.
WAM operates several listed investment companies (LICs). Three examples of those LICs are WAM Capital Limited (ASX: WAM), WAM Active Limited (ASX: WAA) and WAM Leaders Ltd (ASX: WLE).
McMillan Shakespeare Limited (ASX: MMS)
WAM Active owns McMillan Shakespeare shares and describes it as Australia's largest provider of salary packaging, novated leasing, consumer and fleet financing and management services.
The company manages more than 290,000 employee benefit programs and over 70,000 vehicles throughout Australia, New Zealand and the United Kingdom.
In January, the ASX share announced it expects underlying net profit after tax (NPAT) for the first half of FY21 to be $42.7 million, up from $37.8 million in the first half of FY20.
The fund manager believes that the low interest rate environment, strong consumer confidence and a strong market for new car sales will benefit fleet and novated leasing companies over the next 12 months.
Bega Cheese Ltd (ASX: BGA)
Bega Cheese is an ASX share that's owned in the WAM Capital portfolio.
The leading dairy business is currently changing its focus on activities that are higher up the value chain and mitigating the risks that come with commodity markets.
WAM is also attracted to Bega Cheese after the acquisition of Lion Dairy & Drinks. With this acquisition, Bega will effectively double its annual revenue to $3 billion, increase its dairy footprint and dramatically increase its distribution network in the country.
Incitec Pivot Ltd (ASX: IPL)
Incitec Pivot is the third ASX share pick. It's a business that's in the WAM Leaders portfolio.
WAM Leaders described Incitec Pivot as a global industrial chemicals business that manufactures and distributes industrial explosives, industrial chemicals and fertilisers.
One of the most important drivers of the Incitec Pivot share price is commodity prices, according to WAM Leaders.
In January, ammonia, urea and DAP fertiliser prices rallied sharply, driven by improved seasonal conditions, strong soft commodity prices, constrained supply and improved industrial demand. This has offset the strengthening Australia dollar (combined with the company's foreign exchange hedging program) and higher natural gas prices, which are major costs to the ASX share.
WAM Leaders said that it expects the fertiliser price momentum to continue to support the share price, with earnings upside outweighing the potential headwinds facing the Australian coal market.
