Even China, which had suffered from brutal zero-virus policies for three years, is starting to relax its stance despite potentially devastating health consequences.

This means that many businesses are now adjusting to a new post-pandemic environment.

This week Wilson Asset Management analysts named two ASX shares to buy for companies that could benefit from this new era:

The business now exceeding pre-pandemic numbers 

According to Wilson senior equity analyst Shaun Weick, iCollege Ltd (ASX: ICT) is set to cash in from a resurgence in student numbers.

"Students definitely want to come back," he said in a WAM video.

"The recent quarterly update highlighted that enrolments are at records and they're exceeding pre-COVID levels."

The stock price for the vocational education provider has roughly doubled from 12 months ago, which is a remarkable effort considering the rest of the market's underperformance.

Weick reckons the future is bright for this ASX share.

"What the market's missing on this stock is around the incremental operating leverage as capacity within their colleges are filled, which we think will drive earnings upgrades," he said.

"The balance sheet's in good shape. We think they'll undertake acquisitions from here, so that's a strong buy from us."

This business actually improved in the last housing downturn

Online furniture merchant Temple & Webster Group Ltd (ASX: TPW) is a buy for Wilson senior equity analyst Sam Koch.

The business and the stock boomed during the first wave of COVID-19 lockdowns, with consumers eager to improve their home environment.

That sugar hit is now in the past, and with the share price less than half of what it was a year ago, Koch feels like it's time for a new life.

That's despite the economy now slowing down from massive interest rate hikes.

"Yes, a weaker consumer and a weaker housing market are worth monitoring," he said.

"However, we see their relative value offering, their drop ship model, and their prudent cost management will be able to see them outperform and take [market] share during this downturn."

Koch's theory has some historical precedence.

"You only have to go back to 2018 when the last housing market downturn happened and they actually saw an improvement in gross profit margins as a result of the product mix shift."

The Wilson team's bull case for Temple & Webster is "simple", he added.

"We just see that they've been able to comp the high sales period during COVID lockdowns last year, and now we should be able to see sales growth returning to the business and a re-rating occurring over the period."

The post 'Strong buy': Experts name 2 ASX shares enjoying a post-COVID resurgence appeared first on The Motley Fool Australia.

WAM operates several listed investment companies (LICs). Some, like WAM Leaders Ltd (ASX: WLE) and WAM Capital Limited (ASX: WAM), focus on larger companies.

There's also one called WAM Microcap Ltd (ASX: WMI), which focuses on small-cap ASX shares with a market capitalisation under $300 million at the time of acquisition.

WAM says WAM Microcap targets "the most exciting undervalued growth opportunities in the Australian microcap market".

These are the two small-cap ASX shares the fund manager outlines in its recent monthly update.

iCollege Ltd (ASX: ICT)

WAM described this business as a provider of accredited and non-accredited courses and services across Australia. It also operates an international recruitment agency. The iCollege share price is up 60% since 24 August 2022.

It was noted that the COVID-19 period has been challenging, but the reopening of Australian borders and a range of government initiatives aimed at encouraging international students to return has led to iCollege seeing a "surge" in demand from overseas students.

The fund manager also said the small-cap ASX share is strongly positioned to benefit from this trend with the company revealing in its FY22 result that the number of English language students has exceeded pre-COVID levels. New student offers and enrolments at Go Study are increasing on a month-over-month basis.

The intake of international bachelor degree students is rising steeply and will "contribute to strong revenue growth into FY24 and onwards".

Concluding its positive thoughts, WAM explained:

We believe the market is underestimating the company's operating leverage associated with filling incremental classroom capacity, underpinning earnings upgrades. The strong balance sheet also provides opportunity to deploy capital into earnings accretive acquisitions over the medium-term.

CogState Limited (ASX: CGS)

The other small-cap ASX share mentioned, CogState, was described as a leading technology company optimising brain health assessments to advance medicine development and enable earlier clinical insights in healthcare. The CogState share price is up 30% since 27 September 2022.

Last month, its global commercial partner Eisai reported a successful phase three trial result for its new Alzheimer's disease drug, which met both its primary and secondary endpoints.

WAM noted that the drug reduced clinical cognitive decline by 27% compared to a placebo in a study involving 1,795 participants with early Alzheimer's disease.

Eisai will continue to seek approval for the drug in the US, Japan, and Europe.

The fund manager said the adoption of Cogstate's technologies at scale has been predicated on a commercialised drug in the market to screen for potential patients suitable for treatment.

Assuming the drug is approved, WAM said:

We anticipate this to materialise in the 2023 calendar year, driving upgrades to revenue and earnings. Additional opportunities exist with highly-anticipated read-outs from two other pivotal phase three Alzheimer's drugs, providing near-term catalysts for the company.

The post These 2 small-cap ASX shares have soared, but a fund manager still tips them as buys appeared first on The Motley Fool Australia.

The micro-cap ASX share is having a great 2022 so far. While the S&P/ASX All Ordinaries Index (ASX: XAO) has been falling 12%, the iCollege share price has gained 71%. Now that's an outperformance.

iCollege is a leading vocational education provider comprised of businesses providing accredited and non-accredited training across Australia.

In an interview on Livewire, 1851 Capital's Chris Stott says iCollege shares are a buy.

Stott said:

This company's in the beautiful position that they've got extraordinary demand for their product in the form of students coming back into the country post-COVID-19.

They can travel again, they're having to add capacity in the form of new facilities to house a lot of these students.

So again, strong balance sheet, very well run, with the merger with RedHill not so long ago, so buy.

Stott is referring to iCollege's off-market takeover of RedHill Education Limited in October 2021. The deal was that RedHill investors would receive 9.5 iCollege shares for every RedHill share they owned.

iCollege received 94% support from RedHill shareholders, which enabled it to compulsorily acquire the remaining shares in October 2021.

What's news at iCollege?

iCollege released its FY22 full-year results on 29 August.

Revenue was up 187% to $46.8 million on the prior corresponding period (pcp), with RedHill contributing $31.5 million.

Its earnings before interest, tax, depreciation, and amortisation (EBITDA) went up 37%. The company said growth was "driven by [the] RedHill acquisition and recovering international student revenues".

The company said it expected revenue and profit "to materially increase in FY23".

This is due, in part, to student numbers exceeding pre-COVID levels, growth in bachelor degree intakes, restructuring activities, and higher campus utilisation to improve earnings.

The company has a market capitalisation of $213.59 million.

The post Up 50% in a month, fundie reveals ASX micro-cap share in a 'beautiful position' appeared first on The Motley Fool Australia.