The leading investors from Wilson Asset Management (WAM) have shared thoughts on two ASX shares.
But does WAM have a claim of stock-picking pedigree? The WAM Capital portfolio has delivered an investment return of 14.5% 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)'s return of 7.9% per annum over the same timeframe.
With that in mind, here are the two ASX shares WAM Capital has outlined in its recent monthly update.
News Corporation (ASX: NWS)
WAM described this company as being comprised of businesses across a range of "media verticals". It owns or has stakes in, The Wall Street Journal, Dow Jones, New York Post, HarperCollinsPublishers, The Australian, the Herald Sun, the Daily Telegraph, news.com.au, Sky News Australia, The Times, The Sun, Foxtel, Binge, Kayo and a substantial stake in REA Group Limited (ASX: REA).
The fund manager said that in October, activist hedge fund and News Corp investor Starboard Value expressed that the company should seek a US$7 billion spin-off of its online property businesses to help increase its market value.
Starboard Value reportedly highlighted the "latent and intrinsic value" of News Corporation, which helped push the News Corp share price higher in October and backed up WAM's belief that the ASX share is "undervalued".
The fund manager then said:
We continue to believe the outlook for the company's media assets is positive and look forward to News Corporation's first-quarter update in November, where we see the potential for earnings upgrades.
Tyro Payments Ltd (ASX: TYR)
Tyro is a payments solutions provider and also offers complementary business banking products.
WAM noted that the ASX share recently held an investor day which highlighted the company's executive management team and the growth outlook for the business.
Even though Tyro did confirm a "positive outlook" for the business in FY24, WAM said it disappointed the market because Tyro didn't share much information about the impact of competition.
The fund manager pointed out that a number of companies were sold off in October following investor days as "investors took advantage of increased liquidity." Why is WAM positive on the company? The investment team said:
We were pleased with the outlook that Tyro Payments presented and have taken advantage of the recent sell-off in the company to increase our holding within the investment portfolio.