S&P/ASX 200 Index (ASX: XJO) stocks are a great place to find companies that are large enough to have scale benefits and impressive margins, but still have good growth potential.
We're going to look at some businesses identified by Wilson Asset Management (WAM) as leading opportunities within the WAM Leaders Ltd (ASX: WLE) portfolio. This listed investment company (LIC) is actively investing in the highest-quality Australian shares.
Let's take a look at which businesses the fund manager is excited by.
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Zip Co Ltd (ASX: ZIP)
Zip shares are one of the opportunities picked out by the WAM Leaders team.
The investment team pointed out that the buy now, pay later business released a trading update in June that increased the company's FY25 guidance, after a strong performance in the US where total transaction value (TTV) growing by over 40% year-over-year.
The WAM Leaders team decided to buy Zip shares after market concerns due to weakening consumer spending and the potential for a bad US debt cycle triggered a sharp sell-off of the stock during March and April. WAM thought the ASX 200 stock's sell-off was driven by sentiment rather than fundamentals.
In the June update, Zip said there had been no material change to loss rates despite strong volume momentum, giving it the capacity to increase marketing in the US and help win new customers.
WAM Leaders concluded:
We continue to see upside given the considerable capacity for market share gains and relatively modest valuations.
James Hardie Industries plc (ASX: JHX)
The other ASX 200 share that WAM Leaders pointed out was James Hardie, a building products business with a significant presence in the US.
James Hardie claims to be the world's number one producer of fibre cement and fibre gypsum building solutions. It's also a leader in the European premium timber frame and dry lining business.
WAM noted that a merger between James Hardie Industries and US outdoor building materials company The AZEK Company was approved by AZEK shareholders in June, with the transaction completing on 1 July 2025.
The acquisition provides the ASX 200 stock with an expanded addressable market and accelerates growth through continued material conversion, according to WAM.
The fund manager revealed that James Hardie remains a "key holding" in the WAM Leaders investment portfolio.
It said:
Despite near-term market headwinds, we remain constructive on the long-term structural fundamentals of the US housing market, as well as the company's ability to execute on the integration with AZEK.
