The fund managers in charge of the listed investment company (LIC) WAM Capital Ltd (ASX: WAM) are excited about the potential returns of certain ASX shares.
Smaller ASX shares may have more growth potential than larger companies because they are earlier on in their growth journeys.
WAM Capital aims to find the most compelling undervalued growth opportunities in the Australian market. Let's look at two of them that were recently highlighted.
Image source: Getty Images
Artrya Ltd (ASX: AYA)
The fund manager described Artrya as a medical technology company that uses artificial intelligence (AI) to help detect coronary artery disease using non-invasive scans in emergency and primary care settings.
WAM noted that the Artrya share price increased in April after the release of the FY26 third-quarter results.
The investment team said the result highlighted a key milestone: the company has entered a revenue-generating phase with its foundation customer, Tanner Health, and is commencing patient scanning using Artrya's platform.
Multiple major US partners, including Northeast Georgia Health and Cone Health, continued onboarding and are expected to commence scanning by early FY27, according to WAM, supporting a pathway to multi-site revenue growth.
The ASX share also progressed its Salix Coronary Flow module, an AI tool that assesses coronary blood flow from CT scans, towards US Food and Drug Administration (FDA) submission for regulatory approval, targeting rollout in the first half of FY27.
The fund manager concluded its thoughts on the business with the following:
We believe the share price performance demonstrates increasing confidence in execution, with scan volumes and revenue conversion being key near-term milestones.
FINEOS Corporation Holdings PLC (ASX: FCL)
The other ASX share WAM highlighted from the WAM Capital portfolio is FINEOS, which develops software used by global health insurers to manage core functions such as policy administration, claims handling, and customer billing.
The fund manager noted that the FINEOS share price rose during the month after a solid quarterly update that supported confidence in improving cash generation and contract momentum.
FINEOS reported free cash flow of €11.1 million and a closing cash balance of €47.1 million (up €19.3 million on the prior quarter), highlighting continued progress towards its FY26 profitability and cash targets.
WAM said that new contract wins, including a North American client and the Motor Accidents Insurance Board of Tasmania, also demonstrated continued demand for the platform.
Guidance was reaffirmed for FY26 revenue of €147 million to €152 million.
The fund manager concluded:
We believe the April share price strength reflects growing confidence in the company's ability to increase cash generation, and translate contract wins into sustainable earnings.
