The investment team at Wilson Asset Management (WAM) has picked out some ASX shares that could be undervalued and prime buying opportunities.
WAM runs a number of different listed investment companies (LICs) including WAM Research Limited (ASX: WAX) and WAM Active Limited (ASX: WAA) which looks to find undervalued opportunities on the ASX share market.
In the latest monthly update, WAM revealed two of its leading ideas which could produce outperformance.
Tourism Holdings Ltd (ASX: THL)
WAM described this ASX share as a global tourism operator and the largest commercial recreational vehicle rental operator in the world.
The fund manager pointed out that the company announced "strong" FY23 half-year results and "record guidance", which revealed that it now expects an improved underlying net profit after tax (NPAT) to be "above NZ$75 million".
WAM said that the guidance was "reflective of the strong trading in the first half of FY23 and a positive outlook for the remainder of FY23". The fund manager explained its positive outlook for the business:
We continue to remain positive on Tourism Holdings' outlook as the tourism industry continues to recover and the business benefits from synergies following the merger with Apollo Tourism & Leisure.
Temple & Webster Group Ltd (ASX: TPW)
The fund manager described the ASX share as a pure play online retailer of furniture and homewares.
Last month, Temple & Webster released its FY23 half-year result, with revenue of $207 million, which was down year over year from $235.4 million in FY22. WAM also pointed out that the company noted that sales in the first five weeks of the 2023 calendar year were also down by 7%.
The fund manager pointed out that the negative result and overall market sentiment led to a decline of the Temple & Webster share price, which fell around 27% on the day of the report announcement.
WAM said:
Despite the slowing growth in home goods retail, we believe Temple & Webster Group remains in a great position to leverage the long-term opportunity to expand into the e-commerce space in the Australian furniture and homewares sector.
Temple & Webster also recently launched a share buyback of up to $30 million.
