Fund manager Wilson Asset Management is backing ASX tech shares Life360 Inc (ASX: 360) and TechnologyOne Ltd (ASX: TNE) to outperform despite market headwinds like inflation.
Wilson Asset Management has just lodged its May investment updates. The fund manager issues an update for each of its funds listed on the ASX every month.
The update for the WAM Capital Limited (ASX: WAM) fund noted that these two tech shares were significant positive contributors to its performance last month.
Overall, the WAM Capital portfolio declined over May but outperformed the S&P/ASX 200 Accumulation Index (ASX: XJOA). (This index is the S&P/ASX All Ordinaries Index (ASX: XAO) plus reinvested dividends.)
'Excited' by progress toward profitability
Life360 owns an app providing family safety services, such as location sharing and driver safety reporting.
Wilson noted the strong momentum in subscription revenue and cost efficiencies that enabled Life360 to achieve a 34% year-over-year (yoy) increase in revenue to US$68.1 million in 1Q CY23.
Wilson said:
We are excited by the progress Life360 has achieved against its strategic objectives over the past year and the business' path to profitability in 2023 driven by its strong revenue momentum.
The ASX tech share rose 11% on the day the company released its 1Q CY23 results.
This ASX tech share can weather the inflation storm
TechnologyOne is an enterprise software-as-a-service (SaaS) company. Its technology platform is used by more than 1,300 companies, government agencies, universities, and other organisations.
Wilson said growth in new customer numbers and the conversion of existing customers to SaaS contracts contributed to a record first-half profit with annual recurring revenue (ARR) up 40%.
TechnologyOne shares will pay a 10% improved dividend of 4.62 cents per share.
Wilson said:
We remain confident in the company's ability to weather the sustained inflation and increasing interest rates, and look forward to seeing it execute its long-term investments in research and development.
The ASX tech share hit a new record high of $15.86 on the day the company released its 1H FY23 results. The shares continued their run to reach $17.12 a few days later.
WAM Capital shares hit a new 52-week low of $1.47 in intraday trading on Wednesday.
My colleague Tristan recently reported on why profitable ASX tech shares could have an edge if inflation sticks.
