The high-performing fund manager Wilson Asset Management (WAM) has recently identified some ASX blue-chip shares that it owns (or owned) in one of its leading portfolios.
WAM operates several listed investment companies (LICs). Two of those LICs are WAM Capital Limited (ASX: WAM) and WAM Research Limited (ASX: WAX).
There's also one called WAM Leaders Ltd (ASX: WLE) which looks at the larger businesses on the ASX, which you could call the ASX blue-chip shares.
WAM says WAM Leaders actively invests in the highest quality Australian companies.
The WAM Leaders portfolio has delivered gross returns (that's before fees, expenses, and taxes) of 15.2% per annum since its inception in May 2016. That is superior to the S&P/ASX 200 Accumulation Index average return of 10%.
These are the blue-chip ASX shares that WAM outlined in its most recent monthly update:
Ampol Ltd (ASX: ALD)
WAM described Ampol as a business that engages in purchasing, refining, and distributing petroleum products in Australia, New Zealand, Singapore, and the US.
The fund manager said the business has been severely impacted by the New South Wales and Victoria lockdowns. There is an expectation that both retail fuel volumes and jet fuel volume will recover as mobility improves and borders open.
It was pointed out that Ampol has made a proposal to buy Z Energy Ltd (ASX: ZEL). Z Energy is the market leader in New Zealand with a market share of approximately 40% of retail fuel. It has a similar business model to Ampol.
In October 2021, this transaction was approved by Z Energy shareholders.
WAM is positive on the strategic rationale of the acquisition for the synergies resulting from operating at a larger scale and the opportunities that it would unlock for the Ampol trading business.
The Z Energy acquisition will be fully funded by debt and will add to both earnings and free cash flow.
National Australia Bank Ltd (ASX: NAB)
The other ASX blue chip share that WAM Leaders mentioned was the big four ASX bank National Australia Bank.
WAM noted that NAB performed strongly in October, with "high expectations" building ahead of its FY21 result.
The fund manager pointed out that NAB subsequently delivered a "strong" result with momentum across all divisions. It made an FY21 cash profit of $6.5 billion and doubled its final dividend for shareholders to $0.67 per share.
National Australia Bank continues to be WAM Leaders' preferred exposure in the banking sector. That is due to its "capable management team, a sector-leading business bank taking market share, further progressed cost management initiatives than peers, and its strong capital position".
