2 little-known ASX shares this fund manager rates highly

The fund manager Wilson Asset Management (WAM) has named two ASX shares which may be little-known but could be good opportunities.

WAM runs a number of different listed investment companies (LICs) which focus on different areas of the market. Some of those LICs include WAM Capital Limited (ASX: WAM), WAM Research Limited (ASX: WAX) and WAM Leaders Ltd (ASX: WLE).

While WAM Leaders focus on names that can be found in the S&P/ASX 200 Index (ASX: XJO), some of the others, like WAM Research, are able to look at smaller businesses to find opportunities.

Here are those two ASX shares that some investors may not have heard of, but could be interesting:

Capricorn Metals Ltd (ASX: CMM)

The fund manager describes this ASX share as an Australian-based gold producer in Western Australia.

WAM noted that the company reported a strong result in the quarter for the three months to June 2022. This update showed record production from its Karlawinda gold project, completing an “outstanding” first full year of operations at the site.

This meant that Capricorn Metals was able to achieve the upper end of its FY22 earnings guidance, with total gold production of 118,432 ounces.

The fund manager also pointed out that the company announced further results from its Mount Gibson project in July after expanding the drilling program from 81,000m to 105,000m, highlighting the “quality and growth potential of the resource at the site”.

WAM called the result “excellent” because the sector is facing a “challenging” environment with increasing costs and labour shortages. The fund manager also said that the ASX share continues to deliver “strong” operational performance, it’s in an “excellent position to create balance sheet flexibility” and the investment team is positive on the outlook and growth opportunities for the company in the upcoming year.

Johns Lyng Group Ltd (ASX: JLG)

Another business that WAM covered was Johns Lyng, which specialises as an integrated building service group delivering building and restoration services across Australia and the US for properties and contents damaged by insurable events.

The fund manager pointed out that in June, it upgraded its revenue and earnings guidance for FY22, driven by “increased demand” for the ASX share’s core business-as-usual services, and an increase in catastrophe activity during FY22. The catastrophe work was primarily in flood-affected regions such as northern NSW and south-east Queensland.

Johns Lyng upgraded its revenue forecast by $64.6 million to $867 million. Projected earnings before interest, tax, depreciation and amortisation (EBITDA) was upgraded by $4.3 million to $83 million. The fund manager remains “positive” on the business and it sees a “very strong” outlook for double-digit earnings growth over the next few years.

The post 2 little-known ASX shares this fund manager rates highly appeared first on The Motley Fool Australia.

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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 positions in and has recommended Johns Lyng Group Limited. The Motley Fool Australia has recommended Johns Lyng Group Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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