There are some small ASX shares out there that have good potential to deliver stronger returns than ASX blue-chip shares.
In my mind, it's easier for a small business to double in size than it is for a large business to double in scale. There is only so much of an addressable market for companies to grow into. Eventually, they'll hit a market share growth ceiling.
The fund manager Wilson Asset Management (WAM) has picked out two compelling small ASX shares in the WAM Research Ltd (ASX: WAX) portfolio that could deliver good returns. Let's get into what the WAM investment team think of these two stocks.
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Service Stream Ltd (ASX: SSM)
WAM describes Service Stream as a provider of essential network services to the telecommunications and utility sectors.
The investment team pointed out that the small ASX share delivered a strong FY25 half-year result, with revenue rising 7.9% year over year to $1.27 billion.
The fund manager noted that earnings growth was driven by "solid operational performance" across all divisions, with operating profit (EBITDA) up 16.4% and adjusted net profit after tax (NPAT) up nearly 50%.
WAM pointed out that the Service Stream share price performed well during April – it rose 6.9% compared to the 3.6% rise of the S&P/ASX 200 Index (ASX: XJO). This occurred amid broader market volatility because companies exposed to evolving tariff policies came under pressure.
The investment team then explained why they still like the business:
Service Stream's defensive earnings profile and long-term contracts reaffirms its position as a resilient, cash-generative operator.
Maas Group Holdings Ltd (ASX: MGH)
The other small ASX share Wilson Asset Management highlighted in the WAM Research portfolio was Maas Group, a diversified construction materials, equipment, and services provider with exposure to civil infrastructure, mining, and real estate markets.
WAM said that the company continues to execute its growth strategy strongly, with construction materials remaining its key engine for organic expansion and strategic mergers and acquisitions.
In late March, the Maas Group founder and CEO, Wes Maas, increased his personal stake in the business, which demonstrates his confidence in the company's outlook.
The Maas share price rose by 9.1% in April 2025, which WAM believes reflected renewed investor interest in companies exposed to the domestic economy, benefiting from lower interest rates.
The investment team explained:
We remain constructive on Maas Group Holding's outlook, underpinned by continued portfolio optimisation, a disciplined approach to growth and strong execution.
