I'm always on the lookout to learn about shares that I don't know much about.
I think one of the best places to learn about up-and-coming shares is looking at top fund managers' holdings, particularly ones that bear no resemblance to the index.
Wilson Asset Management have a number of listed investment companies (LICs) such as its largest one, WAM Capital Limited (ASX: WAM). It has other others which focus on different areas of the market, WAM Leaders Ltd (ASX: WLE) searches the S&P/ASX 200 Index for bargains, whilst WAM Microcap Limited (ASX: WMI) looks at shares with a market capitalisation of less than $300 million.
WAM Microcap is the newest LIC out of all of the WAM offerings. It only launched in June 2017, but it has already generated a strong return for shareholders. In its update to 30 November 2017 it revealed that the investment performance since inception was 23.1% and over the last three months it has grown by 14.5%.
Therefore, with this strong performance in mind, it's worth looking at what shares WAM Microcap owns.
One of its top 20 holdings is Zenitas Healthcare Limited (ASX: ZNT). Zenitas is a community-based healthcare provider specialising in the provision of in-home and in-clinic care solutions to reduce the reliance on high-cost acute and post-acute institutional care.
Zenitas operates in the following three segments of the community-based healthcare industry – primary, allied and home care.
I think Zenitas is in a very good spot. The ageing demographics of Australia make for positive tailwinds for the business. The Australian government is always looking to save money, so getting patients away from the hospital is a good move which could help Zenitas.
I think a lot of patients would also prefer home care as opposed to going to a foreign environment.
Zenitas expects organic growth of between 7.5% to 10% in FY18 and expects to start paying a dividend in the half-year report of FY18.
The business continues to add bolt-on acquisitions to improve the business' overall offering. The business has announced two acquisitions in just the last two weeks.
The first acquisition is an 80% stake of the Peninsula Sports Medicine Group for $7.5 million. This business is a leading physiotherapy and allied health services provider with six clinics located in Outer Eastern Melbourne and the Mornington Peninsula.
The second acquisition is buying 100% of Agewell Physiotherapy. Agewell is a leading mobile physiotherapy provider to residential aged cared facilities, retirement villages and the community in New South Wales and Queensland. This acquisition will cost $4.8 million.
Foolish takeaway
Zenitas is trading at an attractive price for what management are predicting FY18's growth will entail. I think both Zenitas and WAM Microcap are worth buying at today's prices.
