The two names in this article that WAM highlighted were among the top 20 holdings of the WAM Active Ltd (ASX: WAA) portfolio, a listed investment company (LIC) that seeks to identify mispricing opportunities in the Australian market.

Let's look at why the following businesses appealed to WAM.

Forrestania Resources Ltd (ASX: FRS)

The first business WAM mentioned was Forrestania Resources, a Perth-based resource exploration company that's targeting gold, lithium, nickel and copper deposits. It's searching for these resources largely in Western Australia's Eastern Goldfields, Forrestania and Southern Cross greenstone belts.

WAM noted that the company is led by executive chair David Geraghty, who has spent 30 years in the resources sector, including 21 years at Mineral Resources Ltd (ASX: MIN), where he played a key role in its breakout success.

Last month, Forrestania Resources executed a binding purchase agreement with Westgold Resources Ltd (ASX: WGX) to monetise ore stockpiles of up to $38 million in gross revenue, with first funds expected in the third quarter of 2026.

The fund manager said the agreement effectively transitions the ASX small-cap share from a developer to a producer, which is typically a major valuation catalyst.

WAM noted that the Lake Johnston mill project is fully funded and, based on current resources, is expected to support several years of production at a low cost. At the current resource prices, this is expected to generate "significant free cash flow relative to the company's current market capitalisation of over $600 million".

The fund manager also noted that the company is assessing additional tenement opportunities, having flagged interest in the Edna Gold Mine, owned by Ramelius Resources Ltd (ASX: RMS).

EchoIQ Ltd (ASX: EIQ)

The other ASX small-cap share that WAM highlighted was EchoIQ, which the fund manager described as an Australian medical technology company focused on improving decision-making in cardiology. It operates an AI-driven software platform.

Its flagship EchoSolv platform harnesses proprietary AI to scan echocardiogram reports and dramatically improve detection of structural heart disease, starting with severe aortic stenosis (AS) and now expanding into heart failure (HF) and beyond.

In December, Echo IQ formally lodged its US Food and Drug Administration (FDA) submission for EchoSolv HF after a standout clinical validation study with Mayo Clinic, with a decision expected in March or April.

WAM said that clearance would significantly expand the ASX small-cap share's US addressable market, with heart failure as the leading cause of rehospitalisation and accounting for 17% of total US healthcare spending.

The fund manager said that industry sources confirm Echo IQ's technology is market-leading, positioning the company for rapid US penetration.

Strategic partnerships remain a near-term catalyst, according to WAM, with active interest from multiple parties, while there is also potential to improve existing reimbursement rates for severe aortic stenosis.

The post 2 exciting ASX small-cap shares this fund manager thinks are buys appeared first on The Motley Fool Australia.

Wilson Asset Management picked out GenusPlus as a compelling business in its listed investment company (LIC) WAM Active Ltd (ASX: WAA) portfolio.This LIC aims to target "mispricing opportunities" in the Australian market.

The LIC has just come off a very strong period. The investment portfolio returned 31.4% over the six months to 31 December 2025, and 41.4% over the full year. Of course, past performance is not a guarantee of future returns.

Let's get into why the investment team at Wilson Asset Management likes GenusPlus Group.

Why it's a compelling ASX share

WAM describes GenusPlus Group as a specialist power and communications infrastructure provider, delivering transmission, distribution and related services across Australia.

The fund manager noted that during January, the GenusPlus Group share price strengthened 18% after the company upgraded its FY26 earnings guidance, pointing to approximately 35% growth of normalised operating profit (EBITDA) compared to the FY25 normalised EBITDA of $67.4 million.

This strength was driven by better-than-forecast performance from the energy and engineering and services segments.

WAM pointed out that this positive momentum was further underpinned by contract wins and project progression, including its joint venture with ACCIONA being awarded by AusNet the approximately $1.6 billion Western Renewables Link construction contract, subject to approvals.

On top of that, the market received confirmation that construction will proceed on the Ausgrid Hunter-Central Coast Renewable Energy Zone sub-transmission line works, with a contract value of approximately $140 million. Construction is planned to commence in February 2026.

The fund manager then said:

We remain positive on the outlook, supported by strong organic growth momentum, with the balance sheet in excellent shape to undertake earnings accretive acquisitions.

What is the valuation of the ASX share?

The business has steadily increased its annual dividend per share each year for the last couple of years and the dividends are being hiked at a fast pace. The company grew its FY25 final dividend per share by 44% to 3.6 cents.

In FY25, the company's total revenue rose by 36% to $751.3 million, infrastructure revenue climbed 30% to $415.6 million, energy and engineering revenue climbed 54% to $234.5 million and services revenue soared 38% to $123.2 million.

It's currently trading at 35x FY25's earnings, but the business is clearly expected to deliver further strong growth in the coming years.

At its AGM, the company said that it's well-positioned for organic growth and targeted strategic acquisitions with a focus on expanding its delivery capabilities. It also said that the momentum of new energy projects connecting to the national electricity network market continues to build, which bodes well for the ASX share's foreseeable future.

The post Experts rate this ASX share as a buy! appeared first on The Motley Fool Australia.

Two of those that have been performing well are from Geoff Wilson's Wilson Asset Management stable, with the $2.1 billion WAM Capital Ltd (ASX: WAM) a good starting place.

This managed fund has been around since 1999, and in recent years, one of the great things about it is its steady dividend payments.

Consistent returns

The fund has paid dividends every year since its formation and, in the past few years, has kept its final and interim dividends steady at 7.75 cents, franked to 60%.

Calculated at the current share price of $1.83, that's a trailing dividend yield of 8.47%.

The fund recently put out an investment update, which indicated its investment portfolio performance since inception back in 1999 was 15.3%, compared with the All Ordinaries Index's of 8.6% over the same period.

Some of WAM Capital's top holdings include Life360 Inc (ASX: 360), A2 Milk Company Ltd (ASX: A2M), and Flight Centre Travel Group Ltd (ASX: FLT).

Recent dividend boost

Also from the Geoff Wilson stable is WAM Active Ltd (ASX: WAA), a much smaller fund with a value of $82.6 million.

WAM Active has also been a steady dividend payer and recently announced an increased interim dividend of 3.2 cents per share as well as a special dividend of 1 cent per share.

This brought the annualised interim dividend yield up to 6.5%, or 9.3% grossed up.

Mr Wilson said at the time that the six-month investment portfolio performance for the fund had been the best since its inception 18 years ago, allowing the fund to pay the increased dividends, which are still available for investors, given the ex-dividend dates for each are in May and June.

Deputy portfolio manager Shaun Weick said the fund had been positioning itself in precious and base metals "as we believe these companies are well-positioned for near-term outperformance as the US continues to reduce interest rates, global growth improves and the US dollar moves lower''.

Some of WAM Active's top 20 holdings include Capstone Copper Corp (ASX: CSC), Zip Co Ltd (ASX: ZIP), and Alcoa Corporation (ASX: AAI).

The third fund, which is looking attractive from a trailing dividend yield perspective, is the Ophir High Conviction Fund (ASX: OPH), which is sitting on trailing returns worth 8.3%, unfranked.

Ophir's dividends have been less predictable than those of the previous two funds, but its portfolio performance since inception in 2012 has been robust, at 14%, easily surpassing its benchmark target.

Some of Ophir's top holdings include Megaport Ltd (ASX: MP1), ResMed Inc (ASX: RMD), and Infratil Ltd (ASX: IFT).

The post Looking for strong dividend yields? These three managed funds might fit the bill appeared first on The Motley Fool Australia.

The fund, which is part of well-known fund manager Geoff Wilson's stable, will pay a fully-franked interim dividend of 3.2 cents per share, up from 3 cents previously, plus a special dividend of 1 cent per share to be paid mid-year, leading to a grossed-up dividend yield on an annualised basis of 9.3%, the fund said on Tuesday.

Historically strong figures

Mr Wilson said in a statement to the ASX that the six-month performance of the fund's portfolio for the second half of the calendar year was "the strongest for WAM Active since inception 18 years ago''.

He went on to say:

WAM Active's proven and flexible investment strategy, coupled with the expertise of the investment team and the dynamic portfolio construction continues to deliver excellent investment portfolio performance for shareholders.

Plenty of room to grow

WAM Active Deputy Portfolio Manager Shaun Weick said the team had been trading actively to take advantage of opportunities.

He said further:

Over the past six months, we have materially increased portfolio turnover to take advantage of the opportunities we see in the market, whilst at the same time actively managing the cash position to cushion downside exposure. In recent weeks we have seen a material shift in domestic investor sentiment as the outlook for inflation and interest rates has been reassessed higher. Accepting this adjustment, we expect the upcoming February reporting period should provide compelling trading opportunities.

Mr Weick said the WAM Active team was watching the metals markets in particular.

WAM Active has progressively rotated positioning towards precious and base metals as we believe these companies are well positioned for near term outperformance as the US continues to reduce interest rates, global growth improves and the USD moves lower. We believe this environment warrants an active approach to portfolio construction which positions the fund well. Whilst capital markets activity has generally improved this year, the performance of recent IPOs suggest caution is warranted in this respect. Overall, we remain optimistic on the outlook for markets into 2026 and are excited by the opportunities that could present over time,

WAM said the fund beat the performance of the S&P/ASX All Ordinaries Index (ASX: XAO) by 30.8% over a 12-month period.

WAM Active shares were 5.1% higher on the positive performance news on Tuesday, changing hands for $1.04 apiece.

The ex-dividend date for the interim dividend is May 15, while the ex-dividend date for the special dividend is June 17.

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Compounding is a very powerful force – businesses earlier on in their growth journey can expand significantly before size starts becoming a major roadblock to strong returns.

The fund manager Wilson Asset Management (WAM) runs a number of listed investment companies (LIC) including WAM Active Ltd (ASX: WAA) which targets mispriced opportunities in the ASX share market.

The investment team from WAM outlined two opportunities in the portfolio including a mining company and Australian medical technology company.

Lindian Resources Ltd (ASX: LIN)

WAM describes Lindian Resources as an Australian-based bauxite and rare earths company that has operations across exploration, mining and processing with projects in Malawi, Guinea and Tanzania.

The fund manager noted the company is focused on advancing the Kangankunde rare earths project in Malawi alongside an Australian downstream route.

In October, the Lindian Resources share price rise of 22% reflected "improved project clarity and de-risking through confirmation that Kangankunde will not be affected by Malawi's raw-minerals export order."

Last month, the ASX mining share also announced its update for the three months to September 2025, which included a number of achievements, including a final investment decision on the Kangankunde project, enabled by the successful completion of a $91.5 million capital raising.

That placement will fully fund the ASX small-cap share's project until first production in the fourth quarter of 2026, as well as a long-term strategic partnership with Iluka Resources Ltd (ASX: ILU).

WAM concluded its thoughts on the business with the following:

We believe the company's recent activity supports investor confidence in the near-term and positions the company to play a pivotal role in the global rare earth supply chain.

Artrya Ltd (ASX: AYA)

The other ASX small-cap share that WAM wanted to highlight in the WAM Active portfolio is disruptive medical technology company Artrya, which is focused on the detection and management of coronary artery disease.

The fund manager noted that coronary artery disease is the leading cause of death in developed countries, but diagnostic methods have remained unchanged for almost five decades.

Artrya uses artificial intelligence (AI) to deliver accurate and non-invasive diagnoses in an emergency and primary care settings.

In October, the Artrya share price jumped by 45% following the completion of an oversubscribed capital raising program.

The funding raised meant it secured growth capital and positioned the ASX small-cap share to accelerate its product roll-out and regulatory initiatives.

WAM concluded on the business:            

Longer term, we believe the strengthened balance sheet supports execution on a capital-light software-as-a-service model with expanding global opportunities.

The post These 2 ASX small-cap shares have big potential for returns appeared first on The Motley Fool Australia.

One of the listed investment companies (LICs) that WAM runs is WAM Active Ltd (ASX: WAA), which aims to find mispriced opportunities in the Australian market.

The two businesses WAM has highlighted are very different – one is a key player in the Australian agricultural world, while the other plays a part in the aerospace industry.

Let's take a look at the stocks that WAM likes.

Iperionx Ltd (ASX: IPX)

The first ASX share is IperionX. WAM said it develops lower-carbon titanium production and critical mineral technologies with applications in aerospace, defence and hydrogen markets.

In its quarterly update for the three months to June 2025, which was released in mid-July, the ASX share revealed the successful commissioning of its new Titanium Manufacturing Campus, with all major equipment now operational.

The company secured a US$46 million private placement (capital raising) to accelerate the expansion of its US titanium production, including fast-tracking orders for long-lead equipment and scaling up forging capacity.

WAM also noted the company received a US$1.3 million task order under a US$99 million Department of Defense (DoD) contract for titanium vehicle parts and reported that its Titan Critical Minerals Project is on track for completion in the second quarter of 2026.

The fund manager said:

These developments position the company favourably with a diversified revenue stream and potential for future DoD contracts, strengthening investor confidence in the company's growth outlook with the market underestimating at-scale economics.

Elders Ltd (ASX: ELD)

WAM says that Elders provides agribusiness services across Australia including livestock and wool agency, feedlots, rural real estate and farm inputs.

The fund manager notes that Elders' July update indicated beneficial rainfall and milder autumn weather in key agricultural regions that "supported pasture recovery, livestock weight gains and crop emergence."

WAM said that the seasonal improvement has boosted livestock prices and client sentiment, and believes the company is emerging from a cyclical low point.

The fund manager said:            

We view the upcoming ACCC announcement the Delta Agriculture acquisition as a key potential catalyst to drive a re-rating of the [Elders] share price with material upside to come via synergies over time with the stock remaining expensive.

The post 2 ASX shares to buy that this fund manager thinks the market has underestimated appeared first on The Motley Fool Australia.

WAM runs a number of listed investment companies (LICs) and a couple of trusts that are targeted at finding some of the most compelling businesses on the ASX for their respective investment areas.

Kelsian is a pick inside the WAM Active Ltd (ASX: WAA) portfolio. WAM Active targets mispricing opportunities in the ASX share market.

The fund manager describes Kelsian as Australia's largest integrated land and marine transport operator and an emerging player in the US motorcoach market. It also has a presence in the UK and Singapore.

It has more than 5,800 buses, 115 vessels, and 24 light rail vehicles. One of its businesses is SeaLink Marine & Tourism, which operates a number of routes for Australian holiday destinations and experiences.

Let's take a look at why the WAM investment team believe Kelsian is mispriced despite rising around 17% in June, as the chart below shows.

Strong performance by the ASX 300 share

WAM said the recent rise in the Kelsian share price has been driven by the company's winning of two new significant contracts, which helped rebuild investor confidence after two years of downgrades.

The June wins announced by the ASX 300 share were two new contracts in the state of Louisiana, USA. The contracts have a value of US$59 million and US$82 million.

WAM's investment team is excited by these wins because they add scale, diversify revenue, reinforce the growth potential of the company's 2023 All Aboard America! acquisition, and provide a "key catalyst behind improving investor sentiment".

The fund manager then explained:

Further, management plans to divest non-core tourism assets to streamline the business and reduce debt, which we believe will drive stronger shareholder returns.

Earlier this year, Kelsian said it's looking to divest its tourism portfolio.

Other target areas for management of the ASX 300 share include driving efficiencies, spending discipline, and reducing costs.

Kelsian also wants to focus on capital-light growth opportunities, increase return on invested capital (ROIC) when 'growth capital' is deployed, and optimise returns from recent capital expenditure investments.

The post Why this fund manager bought this ASX 300 share for bigger returns appeared first on The Motley Fool Australia.

Wilson Asset Management recently released its monthly reports for each of its listed investment companies (LICs).

The reports reveal four ASX tech shares impressing Wilson analysts today.

Here is why they're feeling optimistic about these ASX technology stocks.

4 ASX tech shares with a bright outlook: analysts

Life360 Inc (ASX: 360)

In the May update for WAM Active Limited (ASX: WAA), Wilson analysts discussed the location-tracking software company, Life360.

Life360's 1Q FY25 update exceeded consensus estimates across all key metrics, they said.

Earnings increased by 32%, and the company upgraded its FY25 subscription revenue guidance.

The analysts said:

Additionally, Life360 announced a USD25 million investment in artificial intelligence (AI) safety firm Aura, signaling a strategic move to enhance its product offerings and market position.

We believe the market continues to underappreciate the opportunity within Life360's advertising business, whilst still in its infancy, has the capacity to match the size of the subscription business in the medium-term and expand revenue growth.

The Life360 share price closed at $31.95, up 1.17%.

Catapult Group International Ltd (ASX: CAT)

In the May update for WAM Capital Ltd (ASX: WAM), the analysts said this ASX sports tech solutions provider has several tailwinds.

They said:

Catapult Group International is benefitting from strong structural tailwinds and growing demand for data-driven sports analytics.

The company's management aims to grow the annualised contract value 10 times to approximately USD1 billion.

With a clear land-and-expand strategy, global reach and success in cross-selling, we believe this long-term target is achievable and reflects the company's strong competitive position in a growing market.

The Catapult share price closed at $5.79, up 3.58%.

TechnologyOne Ltd (ASX: TNE)

This ASX tech share is Australia's largest enterprise software-as-a-service (SaaS) company.

The TechnologyOne share price reached an all-time high of $42.88 on 6 June.

The WAM Capital analysts were impressed by TechnologyOne's half-year results, including a 31% rise in net profit after tax to $63 million.

The analysts said:

The company's strong financial results, along with its upgraded full-year profit guidance, strengthened investor confidence and contributed to the notable appreciation in its share price.

TechnologyOne shares finished the session at $40.35, down 0.37%.

WiseTech Global Ltd (ASX: WTC)

In the update for WAM Leaders Ltd (ASX: WLE), the analysts noted WiseTech's acquisition of the supply chain software company, e2open.

They said:

Bolt-on acquisitions are core to WiseTech Global's strategy, and this is their largest acquisition yet, with a purchase price of US$2.1 billion. We are supportive of the deal, given both the strategic rationale and that it is financially accretive.

The analysts said Wisetech is their top ASX tech share pick.

The Wisetech share price closed at $107.37, up 0.2%.

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WAM runs various listed investment companies (LIC) that target different market areas, including WAM Capital Limited (ASX: WAM), WAM Leaders Ltd (ASX: WLE), and WAM Active Limited (ASX: WAA).

The WAM Active portfolio focuses on finding and taking advantage of "mispricing opportunities in the Australian equity market."

In the latest WAM Active monthly update, the investment team talked about two ASX growth shares that they like the look of.  

Nuix Ltd (ASX: NXL)

WAM described Nuix as a technology company that provides investigative software used by banks, audit firms and government agencies.

The Nuix share price rose by approximately 38% in September after the company launched a new product and recently announced medium-term growth initiatives.

When Nuix held its investor day, it announced its expansion into deep learning and integration with options in public AI platforms, which accelerates search and processing performance.

Another recent highlight for WAM was that the ASX growth share appointed Peter McClelland as chief financial officer. McClelland has more than 25 years of experience in this field.

Concluding the optimistic case about Nuix, the fund manager said:

We believe Nuix's advancement in AI integration will add to the existing growth profile of the business as they continue to expand their global market share.

Codan Ltd (ASX: CDA)

The other ASX growth share that WAM highlighted was Codan, a manufacturer and supplier of communications, metal detection and technology.

The fund manager suggested that Codan's recent rise was helped by the company's acquisition of Kagwerks, a US-based provider of leading tactical communications.

Kagwerks provides lightweight communications equipment to the United States Department of Defense through its DOCK-branded solutions. According to WAM, the benefit of this acquisition is that the technology allows "superior situational awareness and strategic advantage in field operations by optimising real-time battlefield intelligence".

More than 30,000 DOCK products have been fielded to date across the US Amry.

The investment team then said:

We view this acquisition as positive to Codan's radio communications segment as it is complimentary to Codan's long-term growth strategy and should drive further earnings growth.

The deal comprises an upfront cash payment of around $33.6 million and royalty payments for five years after the acquisition is completed. In the short to medium term, the ASX growth share expects the royalty rate to be between 1% and 2%.

Under Codan's ownership in the first 12 months, it expects revenue from this business to be between $49 million and $57 million. Assuming that level of revenue is achieved, Codan estimates its operating profit (EBITDA) will be between $8 million and $11 million.

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From data infrastructure to healthcare and e-commerce, Osberg says companies embracing AI innovation are poised for growth and efficiency gains, which will make them attractive prospects for ASX investors.

"Across our investment portfolios, we are positioned to capitalise on AI developments and are focused on finding good quality companies run by strong management teams, with a catalyst to re-rate the share price," he says.

Largest technological change ever seen

Companies already positioned to use AI to accelerate revenue growth and/or reduce operational costs would benefit most from this rising trend, according to Osberg.

He added that there was much excitement in the business community as to how AI might impact company operations, commenting:

In the past year, our small-to-mid cap investment team has conducted over 5,000 company meetings, engaging with management teams to explore how artificial intelligence (AI) could potentially reshape their business, both positively and negatively.

While it is early days, the consensus among these discussions is overwhelmingly positive, with many seeing AI as the largest technological change they have seen.

Which 4 ASX shares stand to benefit from the AI revolution?

Osberg names four ASX shares that he says are well-positioned to benefit from artificial intelligence.

NextDC Ltd (ASX: NXT) stocks

Osberg manages the WAM Capital Ltd (ASX: WAM) and WAM Active Ltd (ASX: WAA) listed investment companies (LICs), which both invest in NextDC shares.

This ASX 200 tech share has risen 21% in the year to date and 48% over the past 12 months.

"The surge in AI is expected to drive increased data consumption, storage and connectivity demands," Osberg says.

"NextDC, a leading data centre operator, stands to capitalise on this trend, highlighted by its recent $1.3 billion capital raising to accelerate development of data centres in Sydney and Melbourne."

Megaport Ltd (ASX: MP1) shares

WAM Capital also invests in Megaport shares. The Megaport share price has risen 47% in the year to date and 150% over the past 12 months.

"Furthermore, Megaport, a provider of on-demand data connection services, is well-positioned to leverage AI-driven revenue growth in data connectivity," Osberg says.

Megaport reported a 785% improvement in EBITDA and a 43% jump in gross profit for the first half.

Pro Medicus (ASX: PME) stocks

This ASX 200 healthcare stock has risen 18% in the year to date and 88% over the past 12 months.

"Pro Medicus, a healthcare software provider, utilises AI to develop technology capable of assisting radiologists," Osberg says.

Goldman Sachs forecasts AI to comprise 9% of Pro Medicus' revenue by FY30.

The broker says:

PME is generating revenue from its Visage breast density AI algorithm … today, and we see the potential value for AI to be significant with adoption driven by improved accuracy and clinical outcomes.

Temple & Webster (ASX: TPW) stocks

Osberg also manages the WAM Research Ltd (ASX: WAX) LIC, which is invested in Temple & Webster shares. The ASX retail share has risen 34% in the year to date and 205% over the past 12 months.

"As AI gradually reduces human involvement in routine tasks, e-commerce companies such as Temple & Webster stand to benefit by reducing operational costs through AI-driven automation, particularly in customer service activities," Osberg says.

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WAM runs a number of different listed investment companies (LICs) including WAM Capital Limited (ASX: WAM), WAM Active Limited (ASX: WAA), and WAM Research Limited (ASX: WAX).

The fund manager likes to look for compelling, undervalued growth opportunities on the ASX share market. The below companies are two investment ideas that WAM recently highlighted.

IPH Ltd (ASX: IPH)

WAM described IPH as Asia Pacific's leading intellectual property (IP) services group with a network of member firms and clients in more than 25 countries.

Last month, IPH announced that it was buying Canadian IP agency Smart & Biggar for a total of $387 million.

The fund manager noted the acquisition will extend IPH's international secondary markets network beyond the Asia Pacific region for the first time and lift IPH "towards being a global leading IP services group".

IPH expects that the transaction will result in adding to underlying earnings per share (EPS) of approximately 10% in the first year of ownership and deliver access to more growth opportunities.

August was also reporting season. Last month, the company announced its full-year result, revealing a 14% year-over-year increase of underlying net profit after tax (NPAT) to $86.7 million as well as an 11% rise in underlying earnings before interest, tax, depreciation and amortisation (EBITDA).

Here is what WAM had to say about the company:

We remain positive on IPH and believe the business has a strong runway for organic and acquisition-led growth over the medium term.

Capitol Health Ltd (ASX: CAJ)

Capitol Health is described by the fund manager as a diagnostic imaging provider to the Australian healthcare market.

Last month, the ASX share announced the full-year result for its 2022 financial year which was better than the market was expecting. It also included the acquisition of Future Medical Imaging Group, a diagnostic imaging services provider, for a total cost of $56.1 million.

WAM pointed out the acquisition is expected to add to EPS in the high single digits. The fund manager said:

With a strong balance sheet and continued investment in well-defined growth opportunities, we believe the outlook for Capitol Health remains strong as diagnostic imaging providers recover from the coronavirus pandemic.

The post 2 little-known ASX shares that this fund manager says have 'strong' outlooks appeared first on The Motley Fool Australia.

WAM operates several listed investment companies (LICs). Two of those LICs are WAM Capital Limited (ASX: WAM) and WAM Leaders Ltd (ASX: WLE).

There's also one called WAM Active Limited (ASX: WAA) which looks at businesses it thinks are the most undervalued.

WAM says WAM Active invests in "market mispricing opportunities" in the Australian market.

The WAM Active portfolio has delivered gross returns (that's before fees, expenses, and taxes) of 10.9% per annum since its inception in January 2008, compared to the Bloomberg AusBond Bank Bill Index return per annum of 2.8%.

These are the two ASX shares that WAM outlined in its most recent monthly update:

AMP Limited (ASX: AMP)

Wilson Asset Management describes AMP as a retail wealth management and banking business operating in Australia and New Zealand with more than 4,000 employees servicing approximately 1.5 million customers.

The fund manager noted that in April, AMP announced it had agreed to sell its funds management arm Collimate Capital's real estate and domestic infrastructure equity business to DEXUS Property Group (ASX: DXS) and its international infrastructure equity business to DigitalBridge Investment Holdco.

WAM points out that the transactions value Collimate Capital's business at up to $2 billion, significantly strengthening AMP's capital position, with plans to use the proceeds to pay down its corporate debt and return capital to shareholders.

WAM believes the sales will allow AMP to focus on driving its 'core' banking and retail wealth businesses which can help improve its competitiveness.

In early May, AMP announced that the ASX share's banking arm's total loan book increased by $500 in the first quarter of the 2022 calendar year. WAM thinks this shows positive signs of growth.

The fund manager anticipates that the core AMP business will continue to perform "well" and unlock future growth as it completes these transactions.

Breville Group Ltd (ASX: BRG)

Breville describes itself as a leading small electrical appliances provider in the consumer products industry.

In April, the Breville share price declined, which was in line with the broad market exposed to consumer spending as risks of a pending recession intensified with inflation data worsening. WAM thinks this points to a weaker consumer environment.

However, the fund manager is positive on the Breville share price thanks to the company's ability to continue expanding its addressable market and its long-term expansion plans to go into new geographies.

Breville said in an update in early May, that it was sticking with its FY22 earnings guidance and it's on track to meet market expectations, with earnings before interest and tax (EBIT) of approximately $156 million for FY22.

WAM continues to believe that the company operates a high-quality business and remains optimistic about the opportunities it can unlock through its global rollout strategy.

The post Why these 2 ASX 200 shares are undervalued opportunities: WAM appeared first on The Motley Fool Australia.

WAM operates several listed investment companies (LICs). Two of those LICs are WAM Capital Limited (ASX: WAM) and WAM Leaders Ltd (ASX: WLE).

There's also one called WAM Active Limited (ASX: WAA) which looks at businesses it thinks are the most undervalued.

WAM says WAM Active invests in market mispricing opportunities in the Australian market.

The WAM Active portfolio has delivered gross returns (that's before fees, expenses and taxes) of 11.2% per annum since inception in January 2008, which is superior to the Bloomberg AusBond Bank Bill Index return per annum of 2.8%.

These are the two ASX shares that WAM outlined in its most recent monthly update:

Champion Iron Ltd (ASX: CIA)

This is a mining business which is headquartered in Canada.

Champion Iron is described as a premium iron ore miner exploring the Bloom Lake and Fire Lake projects in the Canadian province of Quebec.

Last month, Champion Iron announced in its third quarter update that its growth project 'Phase II' remains on track for an April completion.

The ASX share has announced its dividend of C$0.10 per share. It also continues to invest for growth as well.

Champion Iron has increased its leverage to higher iron ore prices. It's progressing growth projects which are expected to double product output this year.

WAM is still bullish on the business and expects "considerable" free cash flow will be generated by the completion of the 'Phase II' project.

Life360 Inc (ASX: 360)

The fund manager describes Life360 as a business which provides a family safety platform that allows parents to track the whereabouts of their children. It has over 33 million users globally.

WAM said the initial catalyst for the investment was the appointment of Randi Zuckerberg, the sister of Meta (Facebook) founder, CEO and Chair Mark Zuckerberg.

In January 2022, Life360 provided an update for the quarter for the three months to December 2021. This showed the third consecutive quarter of record subscribers, which led to a 62% increase in revenue growth. It beat previous company guidance.

The fund manager also noted that the ASX share completed the acquisition of Bluetooth tracking device company Tile in January 2022. The holiday period trading was tracking to plan.

This environment of rising bond yields and the rotation out of higher growth shares has impacted some share prices, so WAM has "managed" the position size accordingly.

Life360 and its underlying business model are "strengthening" according to the fund manager, with the acquisition of Tile causing the company to emerge as a global leader in location tracking services. WAM says the outlook remains positive.

The investment team believe that a potential dual-listing in the US remains a key catalyst for the company.

The post 2 promising ASX shares this fund manager likes appeared first on The Motley Fool Australia.

• WAM has revealed two ASX shares that are liked in the WAM Active portfolio
• TPG Telecom is one buy-rated stock, with merger synergies and a potential asset sale as positives
• Mincor Resources is a nickel player which is making promising progress in WA

Respected fund manager Wilson Asset Management (WAM) has recently identified two ASX shares that it owns in one of its portfolio.

WAM operates several listed investment companies (LICs). Two of those LICs are WAM Capital Limited (ASX: WAM) and WAM Leaders Ltd (ASX: WLE).

There's also one called WAM Active Limited (ASX: WAA) which looks at businesses it thinks are the most undervalued.

WAM says WAM Active invests in market mispricing opportunities in the Australian market.

The WAM Active portfolio has delivered gross returns (that's before fees, expenses and taxes) of 11.8% per annum since inception in January 2008, which is superior to the Bloomberg AusBond Bank Bill Index return per annum of 2.9%.

These are the two ASX shares that WAM outlined in its most recent monthly update:

TPG Telecom Ltd (ASX: TPG)

TPG is a business that owns and operates mobile and fixed networks. It is the owner of a few of Australia's most well-known brands including Vodafone, TPG, and iiNet.

The fund manager pointed out that in early December, founder David Teoh entered into an agreement to sell around 53.1 million TPG Telecom shares, which led to a sell-off of the TPG share price.

WAM also noted that the spread of the Omicron COVID variant also weighed on the company during the month as it reduced the number of international visitors, leading to a reduction in its consumer subscriber numbers.

WAM Active remains invested in TPG and the fund manager remains optimistic about the company's fixed wireless rollout strategy which should help increase profit margins.

The fund manager thinks the base business of the ASX share is undervalued considering its growth profile over the next few years, it likes the risk-reward profile. WAM is particularly attracted by the potential sale of the mobile tower business which could take place over the coming months.

Mincor Resources NL (ASX: MCR)

The other ASX share outlined was Mincor Resources. This business is focused on re-establishing sustainable, high-grade nickel production in the Kambalda district of Western Australia.

WAM points out that in December, the business provided an exploration update that said nickel had been extracted from two development headings at Kambalda. The fund manager said this was a key achievement in the company's nickel restart plans and supported the investment thesis.

WAM's bull case for the company is that there is potentially significant undiscovered nickel sulphide at the company's Kambalda site.

WAM invested in Mincor Resources because of its high-quality management team, the projects which are key to the BHP Group Ltd (ASX: BHP) nickel strategy, and the potential for nickel sulphide discoveries.

WAM Active continues to own Mincor Resources shares because the fund manager believes it will continue to grow its resources as it nears production in 2022.

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Every month, WAM talks about some of the businesses that have performed well and outlines the bullish factors for thinking about the stocks.

Two of the featured ASX shares this month comes from WAM Research Limited (ASX: WAX) and WAM Active Limited (ASX: WAA), which targets opportunities from the smaller end of the ASX, like these two:

Vulcan Steel Ltd (ASX: VSL)

Vulcan Steel is the only pure, value-add steel distributor and processor in Australia and New Zealand, operating as a key link in the steel value chain between steel producers and end-users across a broad range of market segments.

WAM initially participated in the initial public offering (IPO) of the company in November 2021 at $7.10 per share.

The fund manager points out that the ASX share is a founder-led organisation, has long-standing leadership which, in WAM's eyes, are highly capable with significant 'skin' in the game.

In December, WAM noted that Life360 provided a trading update, highlighting a stronger-than-anticipated performance across all business units. This resulted in a upgrade to its forecast net profit after tax (NPAT) at the time of the IPO of 26% to 35%.

The Wilson Asset Management investment team expects growth to be underpinned by cyclical tailwinds, expansion into new products and geographies and business improvement initiatives, while opportunistic mergers and acquisitions also provides a catalyst. Vulcan Steel is well positioned to continue to sector consolidation, according to WAM.

Life360 Inc (ASX: 360)

WAM describes Life360 as a family safety platform that allows parents to track the whereabouts of their children, with over 33 million users globally.

The initial catalyst identified for the investment in Life360 was the appointment of Randi Zuckerberg, sister of Meta (previously Facebook) founder, CEO and Chair Mark Zuckerberg and the belief that the company would upgrade revenue expectations.

The fund manager also noted that in November, the ASX share made its second hardware acquisition for the year, buying a Bluetooth tracking device company, called Tile, for US$205 million.

WAM said that the combination of Life360 and Tile creates an integrated market leader in location solutions, making Life360 the only vertically integrated, cross-platform solution of scale in the market and well-placed to take advantage of the growing location solutions market.

According to the fund manager, Life360 remains "catalyst rich", including potential mergers and acquisitions and a dual listing in the US in the pipeline.

The post This top fund manager just called these leading ASX shares a buy appeared first on The Motley Fool Australia.

WAM operates several listed investment companies (LICs). Two of those LICs are WAM Capital Limited (ASX: WAM) and WAM Leaders Ltd (ASX: WLE).

There's also one called WAM Active Limited (ASX: WAA) which looks at businesses it thinks are the most undervalued.

WAM says WAM Active invests in market mispricing opportunities in the Australian market.

The WAM Active portfolio has delivered gross returns (that's before fees, expenses and taxes) of 12.2% per annum since inception in January 2008, which is superior to the Bloomberg AusBond Bank Bill Index return per annum of 2.9%.

These are the two ASX shares that WAM outlined in its most recent monthly update:

Life360 Inc (ASX: 360)

WAM said that Life360 is a family safety platform serving over 33 million users globally.

In October, Life360 released its September 2021 quarterly update, which beat market expectations and raised its 2021 annualised monthly revenue guidance to between US$125 million to US$130 million.

Life360 CEO Chris Hulls said:

This was another milestone quarter for Life360, with growth continuing to accelerate in the US as the country emerges from COVID-19. We are excited by the metrics the business is delivering, in particular the second consecutive quarter of record subscriber additions taking us to more than 1.1 million Paying Circles, underlying revenue growth of 45% year on year and reaching US$120 million in annualised monthly revenue (AMR) for the first time.

The fund manager is positive on the ASX share, due to its large addressable market, accelerating revenue growth profile and cost discipline.

WAM also said that the company remains "rich" in catalysts that may support the Life360 share price, including potential mergers and acquisitions and a dual listing in the United States.

Pact Group Holdings Ltd (ASX: PGH)

Pact Group was described as an Asia Pacific packaging business that manufactures and supplies plastic and metal packaging for a range of trusted brands.

The fund manager pointed out that during the month, the ASX share released a trading update highlighting the impact that the COVID-19 pandemic had on its FY22 first quarter sales, which coincided with rising input costs as oil prices rose.

Pact said that its FY22 demand remained resilient in the packaging and sustainability and materials handling and pooling segments, with higher raw material and international freight costs being "well managed". In the contract manufacturing segment, demand was weaker than expected and margins were lower because of higher input costs.

WAM believes that the Pact Group share price is trading below its underlying value and that the company's long-term strategy, with a focus on increasing recycling capability and reducing inefficiencies, will drive revenue growth and profit margin expansion in the future.

Regarding ceasing the sale process of its contract manufacturing business, Pact CEO and managing director Sanjay Dayal said:

I have consistently advised shareholders we would sell the business if the sale process met our value hurdle. Continued market uncertainty and supply chain disruption arising from COVID-19 has created challenges in realising our expectation. At this time, we believe retaining the business delivers greatest value for our shareholders.

The post 2 top ASX shares to buy according to WAM appeared first on The Motley Fool Australia.

WAM operates several listed investment companies (LICs). Two of those LICs are WAM Capital Limited (ASX: WAM) and WAM Leaders Ltd (ASX: WLE).

There's also one called WAM Active Limited (ASX: WAA) which looks at businesses it thinks are the most undervalued.  

WAM says WAM Active invests in market mispricing opportunities in the Australian market.  

The WAM Active portfolio has delivered gross returns (that's before fees, expenses and taxes) of 12.1% per annum since inception in January 2008, which is superior to the Bloomberg AusBond Bank Bill Index return per annum of 2.9%.

These are the two ASX shares that WAM outlined in its most recent monthly update:

Temple & Webster Group Ltd (ASX: TPW)

Temple & Webster was the first business that WAM Active picked out as an opportunity. The fund manager explained that this business is an online retailer for furniture and homewares that is capitalising on the tailwinds in e-commerce and the increasing penetration of online retail for furniture and homewares in Australia.

Last month, the ASX share revealed that FY21 revenue had increased by 85%. It also saw earnings before interest, tax, depreciation and amortisation (EBITDA) growth of 141% to $20.5 million.

WAM was pleased to note the performance in the final three months of the 2021 financial year, with revenue beating analyst expectations, despite that period being when the economy and bricks and mortar stores were reopening/reopened.

The fund manager believes this shows that its market share of the furniture and homewares sector is increasing.

WAM thinks that the first few months of FY22 could show strong revenue growth with the lockdowns in Sydney and Melbourne.

Select Harvests Limited (ASX: SHV)

Select Harvests was the other ASX share that WAM noted, which is one of the biggest growers of almonds in Australia.

The fund manager points out that Select Harvests has been a beneficiary of the large increase in demand for Australian almonds over the last decade. Australia is now the second biggest producer of almonds globally, second only to the US.

Last month, the business said it's still seeing strong demand for almonds, with Australian exports up 67% on the prior period. It also confirmed that market pricing had increased, with a downgrade in the US 2021 crop harvest driving an increase in the overall market price for almonds by around $0.50 per kilo, up to a range of between $6.75 per kilo to $7.25 per kilo.

WAM believes almond prices can climb even further, which will benefit Select Harvests, given is increased acreage after the acquisition of the Piangil Orchard in October 2020.

The post 2 top ASX shares to buy according to WAM appeared first on The Motley Fool Australia.

WAM operates several listed investment companies (LICs). Two of those LICs are WAM Capital Limited (ASX: WAM) and WAM Leaders Ltd (ASX: WLE).

There's also one called WAM Active Limited (ASX: WAA) which looks at businesses it thinks are the most undervalued.  

WAM says WAM Active invests in market mispricing opportunities in the Australian market.  

The WAM Active portfolio has delivered gross returns (that's before fees, expenses and taxes) of 12.1% per annum since inception in January 2008, which is superior to the Bloomberg AusBond Bank Bill Index return per annum of 3%.  

These are the two ASX shares that WAM outlined in its most recent monthly update:

Domino's Pizza Enterprises Ltd. (ASX: DMP)

WAM Active explains that Domino's Pizza is a multinational pizza restaurant chain, with the Australian business representing the largest franchisee outside of the US. It also has operations in Europe and Japan.

The fund manager pointed out that in June, Domino's Pizza entered its tenth market, with an agreement with Formosa International Hotels Corporation to acquire the corporate stores and franchise rights of Domino's Taiwan for $79 million on a cash and debt free basis.

Domino's Pizza is the second largest operator in Taiwan with 157 stores and long-term market potential of more than 400 stores.

WAM says that the deal expands Domino's Pizza Asian market by more than 18%. It has increase its store count outlook in Asia to 1,900 by 2030 to 2032 as a result of the acquisition.

The fund manager is positive about the future of Domino's Pizza, with "key" growth markets such as Japan and Germany reaching an inflection point supporting a "robust" organic growth profile. The business has the potential for further acquisitions in the future, according to WAM.

Seven West Media Ltd (ASX: SWM)

Seven West was the other ASX share that WAM Active referenced as an opportunity.

The fund manager described Seven West Media as a large diversified media business. It makes content for television, publishing and digital networks.

Seven West is made up of a few different subsidiaries such as the Seven Network and affiliate channels, as well as The West Australian, The Sunday Times and Seven Studios.

WAM pointed out that, last month, Seven West Media released a "positive" fourth quarter trading update. Those quarterly numbers showed advertising revenue grew by more than 45%. Momentum is expected to continue into the quarter ending 30 September 2021.

Seven West Media's 7plus has also seen a 62% rise in registered users in the year to date. That was faster growth than the market growth of 50.7%. Digital revenue saw an increase of 130% for FY21, with earnings before interest, tax, depreciation and amortisation (EBITDA) of $60 million.

The fund manager is still positive on Seven West Media, with the company expecting to more than double its digital EBITDA in FY22 and continuing cost control. WAM also pointed to the strong free cashflow which is helping de-leverage the balance sheet, which WAM believes is being undervalued by the market.

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Despite a rebound this month, the S&P/ASX All Technology Index (ASX: XTX) is still about 10% off its February high.

The trouble is that most high-flying tech companies are considered future-potential growth shares. The market is currently fearing a rise in inflation from the post-COVID economic recovery.

A rise in inflation can lead to higher interest rates, which are poison to stocks relying on the power of future earnings.

But despite this climate, there are still pockets of tech that Wilson Asset Management portfolio manager Tobias Yao has faith in.

"We still have a little bit of tech exposure, but our ideas are now concentrated on companies with reasonable PE multiples," he told a Wilson video.

"And these companies aren't COVID beneficiaries."

Yao looks after the portfolios of listed investment vehicles WAM Capital Limited (ASX: WAM), WAM Research Limited (ASX: WAX), WAM Microcap Ltd (ASX: WMI) and WAM Active Limited (ASX: WAA).

He named 5 stocks that fit the "reasonable" price-to-earnings criteria that these Wilson funds still hold:

Aristocrat Leisure Limited (ASX: ALL)

The company best known for its poker machines is these days earning significant revenue out of more modern channels.

"Actually over 50% of its business now is now online digital gaming," said Yao.

Aristocrat stocks were down 0.18% to trade at $40.84 on Friday afternoon. It started the year at $31.39.

Carsales.Com Ltd (ASX: CAR)

Yao was positive on the Australian online marketplace last month acquiring the US business Trader Interactive.

"We really like the recent acquisition, but also we like the transition [of] the transaction model going forward," he said.

"We think that's going to permanently lift the revenue growth profile over the medium term."

Carsales stocks were trading at $19.38 on Friday afternoon, which is down 2.66% on the year.

Codan Limited (ASX: CDA)

Wilson funds have "a large holding" in Codan, according to Yao.

"[It's] one of the global leaders in metals detection and communications hardware."

The company this month announced a deal to sell-off its resources technology provider brand Minetec to Caterpillar Holdings Australia.

Unfortunately, the market wasn't a big fan of the $14 million transaction, sending the shares down from its 52-week high reached in late May.

Codan stocks were going for $18.54 on Friday afternoon, which was down 1.38%.

Atomos Ltd (ASX: AMS) and Vista Group International Ltd (ASX: VGL)

In the small cap space, Yao revealed these were the two technology companies that survived his PE ratio cull.

"Atomos is an innovative monitor recorder business and Vista Group… is the leader in software solutions for cinemas."

Atomos shares are up 1.55% this year, while Vista has risen a whopping 35.7%.

"So there are definitely still pockets of opportunities, but it's fair to say we've become a lot more selective in where we deploy our capital."

The post Carsales (ASX:CAR) and 4 other ASX tech shares still worth holding: analyst appeared first on The Motley Fool Australia.

On Thursday, the S&P/ASX 200 Index (ASX: XJO) closed above 7,300 for the first time in history. On Friday, it pushed ahead a further 0.13%.

But does this mean the share market is on the verge of an indelicate correction? The bears, like Jeremy Grantham, obviously think so.

Even though the general market is at record highs, however, there are still rising companies on the Australian bourse that aren't as well-known to investors.

Perhaps they're not in glamorous industries, or they're just playing the tortoise to quietly win the long race.

Fortunately, there are professional fund managers whose job is to find businesses that are being underrated by everyone else.

"There's a lot of cheap companies out there," Wilson Asset Management portfolio manager Oscar Oberg told a company video.

"You just got to find them… We're very bullish [on] small caps and micro caps going forward."

Oberg and his colleague Tobias Yao revealed 3 shares held by Wilson funds that he feels the market doesn't fully appreciate yet:

Ardent Leisure Group Ltd (ASX: ALG)

In the US, Ardent owns the chain of Main Event ten-pin bowling and arcade centres in 43 locations. The company in Australia is best known for running theme parks, such as Dreamworld on the Gold Coast.

"The US recovery is actually going really well on the back of strong government support for consumers and the much more relaxed COVID restrictions," said Yao.

He added that at the current valuation, the risk-reward trade-off is "really appealing" for his team.

"Our view is that at the current share price, you're not paying anything for the theme parks division, which is over $100 million on the balance sheet."

Ardent shares closed Friday at precisely $1, meaning a 40.85% gain for the year to date.

Virtus Health Ltd (ASX: VRT)

Virtus is one of the large IVF providers in Australia, with a market capitalisation of around $516 million.

Yao's team bought the stock 12 months ago on the COVID recovery prospects, but the reasons for holding it now have evolved.

"Our current investment thesis is premised on the new CEO's ability to find new revenue streams — precision fertility, genetics testing, and also digitisation services that they can use for companies overseas."

Virtus stocks finished Friday at $6.42, which is 17.15% up from the start of the year.

The price is still attractive, according to Yao, who works on the WAM Capital Limited (ASX: WAM), WAM Research Limited (ASX: WAX), WAM Microcap Ltd (ASX: WMI) and WAM Active Limited (ASX: WAA) funds.

"It's trading on 14 times price-to-earnings ratio, so we think a lot of these additional optionalities are not being priced into the current share price."

Seven West Media Ltd (ASX: SWM)

Oberg picked out one of the 3 free-to-air television networks in Australia as his example of a hot bargain.

"Seven West Media, which we own in WAM Capital and Microcap, that's trading on a price-to-earnings multiple ratio of 3.5 times earnings right now. It's less than half of what Channel Nine [Nine Entertainment Co Holdings Ltd (ASX: NEC)] trades on," he said. 

"A company like that is sitting right now in our wheelhouse — it's a company we like to invest in."

Seven West shares finished last week at 42 cents, which is 15.3% up just this year.

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