2 exciting ASX shares that are on course for 'robust growth': expert

These little-known ASX shares could be leading contenders for growth.

| More on:
a young boy dressed up in a business suit and tie has a cute grin and holds two fingers up.

Image source: Getty Images

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

Key points

  • The fund manager WAM has named two little-known ASX shares that could keep growing
  • Austin Engineering has experienced a big bump for its order book
  • Healthia is expected to produce more profit than expected and can keep making acquisitions

Fund manager Wilson Asset Management (WAM) has identified two top small-cap ASX shares in one of the portfolios it manages that could be investment ideas.

WAM operates several listed investment companies (LICs). Some, such as WAM Leaders Ltd (ASX: WLE) and WAM Capital Limited (ASX: WAM), focus on larger companies.

There's also one called WAM Microcap Limited (ASX: WMI) which focuses on small-cap ASX shares with a market capitalisation of under $300 million at the time of acquisition.

WAM says WAM Microcap targets "the most exciting undervalued growth opportunities in the Australian microcap market".

These are the two small-cap ASX shares the fund manager outlines in its recent monthly update.

Austin Engineering Ltd (ASX: ANG)

WAM described Austin Engineering as a designer and manufacturer of customised dump truck bodies, buckets, water tanks, tyre handlers and other ancillary products that are used in the mining industry.

The fund manager pointed out that in January, Austin Engineering reported a surge in global truck-tray orders from December 2022 to January 2023, increasing its order book and improving the revenue outlook for the second half of FY23.

WAM noted that the ASX share is now expecting its revenue for the second half of FY23 to be around $250 million as the pipeline is expected to "remain strong for at least the next 18 months."

The investment team like this because of the "robust outlook for growth and a strong balance sheet". WAM thinks that the Austin Engineering share price is still undervalued.

Healthia Ltd (ASX: HLA)

Healthia has more than 300 clinics, according to WAM, describing it as "one of the leading diversified allied healthcare providers across Australia and New Zealand."

The fund manager noted that at the end of January, Healthia provided guidance for the FY23 half-year result, revealing total sales are expected to be between $122.5 million to $127.5 million, which would be growth of 5.4% on the prior corresponding period.

Earnings before interest, tax, depreciation and amortisation (EBITDA) is expected to be between $17.7 million to $18.3 million, which would be a growth of 4% and higher than analyst expectations.

WAM was positive about the fact that the company confirmed its guidance. The fund manager also suggested that the "strong balance sheet" will allow the ASX share to make acquisitions that can add to earnings in the future.

Motley Fool contributor Tristan Harrison has positions in Wam Microcap. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has positions in and has recommended Healthia. The Motley Fool Australia has recommended Healthia. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

More on Opinions

forklift holding boxes next to upward trending arrow signifying share price lift

If you don't own this ASX stalwart stock, you're missing some serious stability

This stock is riding strong tailwinds, I really like its outlook.

Read more »

ETF spelt out on cube blocks with rising arrows.

Are these record-breaking ASX ETFs now too expensive to buy?

Should you ever buy an ETF at an all-time high?

Read more »

a woman wearing red blows a big bubble with bubblegum from her mouth.

Is the surging Nvidia share price causing a stock market bubble?

Is one high-flyer a sign of investors getting too excited?

Read more »

A smiling woman with a satisfied look on her face lies on a rug in her home with her laptop open and a large cup on the floor nearby, gazing at the screen. researching new ETFs

Why Vanguard MSCI Index International Shares ETF (VGS) is a great buy for almost anyone

I love this ETF for its portfolio.

Read more »

a man with a wide, eager smile on his face holds up three fingers.

3 ASX 200 shares I think could grow to be bigger than BHP one day

I have high hopes for the growth potential of these stocks.

Read more »

Smiling man working on his laptop.

2 ASX shares I've been buying!

I liked the prices being offered by these 2 stocks.

Read more »

ASX expensive defensive shares man carrying large dollar sign on his back representing high P/E ratio or dividend
Bank Shares

CBA shares rally to new record high. Is $196 billion too much for this banking giant?

I think CBA shares have a number of problems right now...

Read more »

Focused man entrepreneur with glasses working, looking at laptop screen thinking about something intently while sitting in the office.
Bank Shares

Is it too late to buy Westpac shares at a fresh 52-week high?

I see only one reason to buy Westpac shares today.

Read more »