The fund manager Wilson Asset Management (WAM) has told investors about two compelling ASX shares that it has in its portfolio.
WAM operates several listed investment companies (LICs). Some, like WAM Leaders Ltd (ASX: WLE), focus on larger companies.
There’s also one called WAM Capital Limited (ASX: WAM) which targets “the most compelling undervalued growth opportunities in the Australian market.”
The WAM Capital portfolio has delivered an investment return of 16.7% per annum since inception in August 1999, before fees, expenses and taxes. This gross return outperformed the S&P/ASX All Ordinaries Accumulation Index return of 8.7% per annum over the same timeframe.
These are the two ASX shares that WAM Capital outlined in its most recent monthly update:
Tuas Ltd (ASX: TUA)
Tuas was created after the merger between TPG Telecom and Vodafone Hutchison Australia last year.
In its first financial year, Tuas revealed that it tripled its subscriptions to reach a total of 392,000 paid active subscriptions on 31 July 2021. It reached a market share of 4.5%.
The subscription growth underpinned “strong” revenue growth for the ASX share, increasing by SG$30 million since October 2020 to SG$34.3 million while also enabling the company to achieve breakeven earnings ahead of market expectations. TPG Singapore, the operational business of the group, achieved a positive earnings before interest, tax, depreciation and amortisation (EBITDA) of S$0.9 million for the 12 months to 31 July 2021.
WAM says that Tuas is set to continue growing as it “tracks positively” in FY22. The fund manager believes the market is yet to fully appreciate the incremental operating leverage as further subscribers are added to the largely fixed cost base.
Maas Group Holdings Ltd (ASX: MGH)
WAM described MAAS Group as a leading independent and vertically integrated construction materials, equipment and services provider with a property development arm.
The fund manager pointed out that in September the ASX share announced it had signed an agreement for the acquisition of Earth Commodities hardrock quarry operation in Gladstone, enabling the company to realise synergies with its Central Queensland construction materials business and increase its growth opportunities in the year ahead.
WAM noted the strategically located quarry assets, significant unutilised capacity and a substantial pipeline of infrastructure spend expected over the next three to five years. It’s that combination of things that makes the fund manager believe the organic growth outlook for the business is compelling and expects this to be further increased by bolt-on acquisitions. The investment team believe there is potential for corporate action within the property arm.
The post Wilson Asset Management (WAM) thinks these 2 top ASX shares are a buy appeared first on The Motley Fool Australia.
Should you invest $1,000 in Tuas right now?
Before you consider Tuas, you’ll want to hear this.
Motley Fool Investing expert Scott Phillips just revealed what he believes are the 5 best stocks for investors to buy right now… and Tuas wasn’t one of them.
The online investing service he’s run for nearly a decade, Motley Fool Share Advisor, has provided thousands of paying members with stock picks that have doubled, tripled or even more.* And right now, Scott thinks there are 5 stocks that are better buys.
*Returns as of August 16th 2021
- WAM Capital (ASX:WAM) share price hits 52-week high amid investment update
- These were the 5 top performing ASX shares in September
- What’s going on with the Myer (ASX:MYR) share price?
- WAM Capital (ASX:WAM) share price hits new high on proposed takeover bid
- Why Beach, Collins Foods, Origin, & Tuas shares are racing higher
Motley Fool contributor Tristan Harrison has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.
from The Motley Fool Australia https://ift.tt/3vdnKEZ