The leading investors from Wilson Asset Management (WAM) have shared thoughts on two S&P/ASX 200 Index (ASX: XJO) shares.
WAM operates several listed investment companies (LICs). Some, like WAM Leaders Ltd (ASX: WLE), focus on larger companies.
Meanwhile, WAM Capital Limited (ASX: WAM) targets "the most compelling undervalued growth opportunities in the Australian market".
But does WAM have a claim of stock-picking pedigree? The WAM Capital portfolio has delivered an investment return of 15% per annum since its inception in August 1999. That's before fees, expenses, and taxes. This gross return outperformed the All Ordinaries Accumulation Index (ASX: XAOA) return of 9% per annum over the same timeframe.
With that in mind, here are the two ASX 200 shares WAM Capital has outlined in its recent monthly update.
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Nextdc Ltd (ASX: NXT)
WAM described Nextdc as an independent data centre operator which builds and delivers the infrastructure platform for the digital economy.
The Nextdc share price went up around 10% in April, as we can see on the below chart.
WAM said that the ASX 200 share rose around 10% in April because of its announcement that the contracted utilisation had increased by 43% since 31 December 2022.
The fund manager also pointed out that the company announced that it had successfully secured further contract wins and its new S3 data centre is now at 46% of total planned capacity.
In explaining why it was a top 20 position in the WAM Capital portfolio and the positive view on the business, WAM said:
We are pleased to see Nextdc's customer growth and we look forward to the progressive realisation of revenue from these new customer contract wins from late FY2024 to FY2029.
HMC Capital Ltd (ASX: HMC)
WAM described HMC Capital as a diversified alternative asset manager which "invests in high conviction and scalable real asset strategies."
The fund manager noted that in April HMC Capital successfully completed its oversubscribed $30 million share purchase plan (SPP) as well as its fully underwritten $125 million institutional placement.
The HMC Capital share price went up by around 9% in April, as can be seen in the chart below.
The ASX 200 share is planning to use the raised money to fund its commitment to the capital raising announced by one of its funds, Healthco Healthcare and Wellness REIT (ASX: REIT), which is a real estate investment trust (REIT). Some of the money will also be used to "provide an equity backstop for the new unlisted fund."
The investment team explained why they were impressed by the HMC Capital business:
These accomplishments showcase HMC Capital's ability to secure capital amidst challenging market conditions and support the company's goal to achieve $10 billion in assets under management by December 2023, and subsequently $20 billion thereafter.
