The ASX is home to thousands of potential investments, though the biggest companies get the most attention. The smaller ASX shares could actually be some of the most compelling investments to own right now.

It’s quite easy to underestimate how much of a difference compounding can make to a company’s financial progress and what that can do for shareholders.

Fund managers from the listed investment company (LIC) WAM Active Ltd (ASX: WAA) have revealed two compelling ideas. WAM Active looks for mispriced opportunities in the Australian market.

Impressively, the WAM Active portfolio has returned an average of 14.4% per year since inception in January 2008, before fees, expenses and taxes. That shows the investment team are adept at picking ideas. Let’s look at the two names that WAM highlighted.

Solstice Minerals Ltd (ASX: SLS)

WAM described Solstice Minerals as a copper-gold exploration company advancing its Nanadie Project in Western Australia.

Last month, the company released updated drilling results from its first diamond drilling program. This confirmed the mineralised system extends to a depth of more than 600 metres and remains open at depth.

The fund manager also noted the ASX share’s drilling showed mineralisation continues well below the existing resource, which highlights the potential for the deposit to grow.

WAM said these results build on earlier drilling and continue to demonstrate the scale and continuity of the system.

The investment team concluded that the project currently hosts a 40.4 million tonnes mineral resource estimate and WAM believes the latest results highlight the potential for the resource to grow as drilling continues.

Southern Cross Electrical Engineer Ltd (ASX: SXE)

The other ASX share that WAM highlighted in the WAM Active portfolio was Southern Cross Electrical Engineering, a national provider of electrical, instrumentation and communications services. It also has growing exposure to data centres, infrastructure and electrification projects.

The fund manager noted that, last month, the company upgraded its earnings guidance and strengthened its balance sheet with a capital raising to support further growth.

WAM also said that the ASX share secured more than $150 million of new projects, including work linked to data centre construction.

With that update, Southern Cross Electrical Engineering upgraded its guidance for FY26 underlying operating profit (EBITDA) to at least $75 million, while introducing FY27 EBITDA guidance of at least $100 million.

WAM concluded:               

We believe the company is well positioned to continue growing earnings, supported by demand for data centre capacity and broader electrification trends, with the strengthened balance sheet providing flexibility to pursue further growth opportunities.

The post Leading fund manager reveals 2 exciting ASX shares to buy 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 no position in any of the stocks mentioned. The Motley Fool Australia has recommended Southern Cross Electrical Engineering. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

BHP Group Ltd (ASX: BHP) shares finished last week on a strong note, climbing 2.5% on Friday to close at $58.28.

The ASX mining giant has eased around 4% over the past month, but the bigger picture remains impressive. BHP shares have surged 28% year to date and are up 54% over the past 12 months.

So, after such a powerful rally, should investors still be buying BHP shares in FY27?

What’s driving BHP higher?

BHP shares have ridden a powerful wave of investor enthusiasm for the mining sector, but it hasn’t just been lucky. The company has benefited from an 18% jump in copper prices and a 7% rise in iron ore prices, giving earnings a meaningful boost.

And while BHP remains one of the world’s biggest iron ore miners, it’s increasingly becoming a copper powerhouse. Copper has become the star of the show as demand continues to grow thanks to electric vehicles, renewable energy infrastructure, and expanding electricity networks.

The metal reached a record high of US$6.60 per pound in May, highlighting just how tight the market has become. That shift matters. During the first half of FY26, copper contributed more than half of BHP’s underlying EBITDA, underlining the company’s growing exposure to one of the world’s most sought-after commodities.

Strong operations, cost blowout

Operationally, the news has also been encouraging. In its third-quarter FY26 update, BHP said strong production from its flagship Escondida mine in Chile and Antamina mine in Peru meant full-year group production was expected to finish at the upper end of guidance.

Earlier this year, BHP secured a US$4.3 billion upfront payment through a long-term silver streaming agreement with Wheaton Precious Metals. The deal strengthened the balance sheet while allowing BHP to unlock value from future silver production at Antamina.

Not everything has gone according to plan for BHP shares, however.

On the downside, the company’s Jansen Stage 2 potash project in Canada suffered a sizeable cost blowout. Management of BHP shares now expects the project to cost US$6.9 billion, up from an earlier estimate of US$4.9 billion.

What do the experts think?

Broker sentiment is mixed on BHP shares, although few analysts appear outright bearish.

Morgan Stanley remains one of the most optimistic, retaining its overweight rating and $67.50 price target. That points to a potential 16% upside.

The broker believes recent weakness reflects little more than profit-taking after a strong rally and sees the pullback as a buying opportunity, particularly given its positive outlook for copper.

However, hold remains the dominant rating across the market.

Morgans recently reiterated its hold recommendation while increasing its 12-month target to $59.80.

Meanwhile, Bank of America Corp (NYSE: BAC) maintained its hold rating but lowered its target to $65. CitiGroup Inc (NYSE: C) and Jefferies also kept hold recommendations while trimming their respective price targets to $63 and $65.

Foolish takeaway

BHP enters FY27 in a strong position, supported by rising copper exposure, healthy operations, and a robust balance sheet.

While the easy gains may already be behind investors after the stock’s exceptional run, brokers generally expect BHP to remain well placed if copper prices stay elevated.

For long-term investors seeking exposure to high-quality mining assets, BHP shares continue to make a compelling case.

The post Should you buy BHP shares FY27? Here’s what experts are saying appeared first on The Motley Fool Australia.

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Bank of America is an advertising partner of Motley Fool Money. Motley Fool contributor Marc Van Dinther 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 Scott Phillips.

S&P/ASX 200 Index (ASX: XJO) shares rose 2.77% and produced total returns, including dividends, of 7% in FY26.    

Here, John Athanasiou from Red Leaf Securities shares his insights on three ASX 200 shares (courtesy The Bull). 

Are they a buy, hold, or sell in the new financial year? 

TechnologyOne Ltd (ASX: TNE)

The TechnologyOne share price dropped 28% in FY26 to close out the year at $29.47.

ASX 200 tech shares were smashed between late August through to 30 March this year.

Since then, tech shares have recovered almost 20% while TechnologyOne stock has lifted 16%.

Athanasiou has a buy rating on TechnologyOne shares, commenting:

This technology company holds an embedded position in enterprise resource planning software across government, education and the corporate sector.

The business benefits from long duration contracts, expensive switching costs and a highly recurring revenue base underpinning strong earnings visibility.

The company has consistently delivered double-digit earnings growth, while maintaining disciplined cost control.

While the valuation remains elevated, it’s broadly supported by earnings visibility and structural digitisation tailwinds.

In a market favouring predictable cashflows and defensiveness, TechnologyOne remains a core long duration compounder.

Pro Medicus Ltd (ASX: PME)

The Pro Medicus share price tumbled 29% in FY26 amid a broader healthcare sector rout. 

However, the ASX 200 healthcare share has been recovering ahead of its peers since hitting a 52-week low of $107.75 in February.

Pro Medicus shares are up 82% since that trough. The broader sector did not turn until 3 June but is rapidly rising.

Athanasiou explained his hold rating on Pro Medicus shares:

Pro Medicus remains a premium healthcare technology compounder with a dominant position in US medical imaging software.

The company exhibits strong operating leverage, minimal churn and structurally high returns on capital.

However, valuation is the binding constraint.

The market already embeds sustained high growth over an extended horizon, reducing the margin of safety.

PME remains a high quality hold, with upside dependent on continuing US market expansion and incremental large scale contract wins.

PLS Group Ltd (ASX: PLS)

The PLS Group share price soared 275% to close out FY26 at $5.02. 

PLS Group has reaped the rewards of strongly rebounding lithium prices over the past 12 months.  

Athanasiou has a sell rating on the ASX 200 lithium share, explaining:

PLS is a leading Australian lithium producer. Lithium remains structurally linked to electrification, but near term fundamentals are challenged by expanding supplies.

While PLS asset quality remains strong, earnings are highly leveraged to spot prices, generating volatility through the cycle.

Balance sheet strength provides a buffer, but doesn’t offset cyclical earnings pressure.

PLS remains a high risk recovery trade dependent on the timing of lithium re-balancing, with limited near term visibility.

The post Buy, hold, sell: TechnologyOne, Pro Medicus, PLS Group shares appeared first on The Motley Fool Australia.

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• Top 5 ASX 200 lithium shares of FY26

Motley Fool contributor Bronwyn Allen 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 Technology One. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has recommended Pro Medicus. The Motley Fool Australia has recommended Pro Medicus and Technology One. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.