The leading investors from Wilson Asset Management (WAM) have told investors about two compelling All Ordinaries Index (ASX: XAO), or All Ords, ASX shares on their radar.
WAM operates several listed investment companies (LICs). Some, like WAM Leaders Ltd (ASX: WLE), focus on larger companies.
WAM Capital Limited (ASX: WAM) targets "the most compelling undervalued growth opportunities in the Australian market".
Does WAM have a claim of stock-picking pedigree? The WAM Capital portfolio has delivered an investment return of 15.1% per annum since its inception in August 1999. That's before fees, expenses, and taxes. This gross return outperformed the All Ordinaries Total Accumulation Index (ASX: XAOA) return of 8.2% per annum over the same timeframe.
Here are the two All Ords ASX shares WAM Capital has outlined in its recent monthly update.
Image source: Getty Images
AMP Ltd (ASX: AMP)
The fund manager described AMP as a business that's a provider of superannuation and investment products, financial advice and banking products in Australia and New Zealand.
WAM noted that the AMP share price rose over July 2022, even though it lost the management rights to the AMP Capital Wholesale Office Fund.
The loss of the management rights of this investment vehicle was a "negative outcome" for AMP. However, this was already expected by the market, according to the fund manager.
In explaining its optimistic view on the All Ords ASX share at the current level, WAM said:
We believe the company is undervalued and trading at an attractive discount to its net tangible assets and has the capacity to return a significant amount of capital to shareholders following its divestment program. We remain positive on the outlook for AMP and believe it is currently mispriced in the market after undergoing the sale of its funds management business, Collimate Capital.
Myer Holdings Ltd (ASX: MYR)
WAM pointed out that Myer surprised investors in July with a trading update, revealing full-year earnings guidance that was ahead of market expectations.
The fund manager said that total sales are now expected to grow by between 12.3% and 12.7% compared to FY21. The full year profit is expected to double compared to FY21.
One of the positives from the update, as noted by Wilson Asset Management, was that all categories across Myer's 58 department stores achieved sales growth. That was despite an environment where consumer confidence is dropping.
Myer has a turnaround plan to keep things driving forwards. The aim is to drive profitability by refurbishing and re-sizing its stores, combined with improving its service standards. WAM says this plan is gathering momentum. The update and turnaround plan reinforced WAM's positive outlook on the department store ASX All Ords retail share.
