2 ASX shares that this leading fund manager thinks are buys

The 2 ASX shares in this leading fund manager's portfolio look like buys according to value-focused WAM Active Limited (ASX:WAA).

| More on:
steps to picking asx shares represented by four growing piles of gold coins

Image source: Getty Images

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

WAM Active Limited (ASX: WAA) is one of the listed investment companies (LICs) in the Wilson Asset Management (WAM) stable that targets ASX shares.

It runs a number of different LICs that target different investments. There's the largest – WAM Capital Limited (ASX: WAM) – which targets undervalued ASX shares. Then there's WAM Leaders Ltd (ASX: WLE) which looks to buy undervalued ASX blue chips.

Since inception in January 2008, WAM Active's portfolio has delivered a gross return of 12.1% per annum before fees, expenses and taxes.

Its hunting ground target is market mispricing opportunities on the Australian stock exchange.

In its latest monthly update, WAM Active outlined these two ASX shares as opportunities:

Reliance Worldwide Corporation Ltd (ASX: RWC)

WAM explained that the Reliance Worldwide designs, manufactures and supplies water flow and control solutions and products for the plumbing industry, with a focus on repair and renovation.

The company operates in the Asia Pacific region, the Americas, Europe, the Middle East and Africa.

WAM Active pointed out that in the FY21 half-year result, the ASX share generated a 13% rise in net sales to $642.4 million. The company also reported a $168.7 million reduction in net debt to $226 million.

Operating cashflow went up by 17% to $155.6 million and adjusted net profit after tax increased by 56% to $99.3 million. It grew the interim dividend by 33% to 6 cents per share.

The fund manager acknowledged that the business faced headwinds over the past few years, but it sees a positive outlook in the home renovation and repair markets which can drive the company in its key markets in the US and the UK.

Airtasker Ltd (ASX: ART)

Airtasker is an ASX share that recently listed on the ASX. It's now the leading online marketplace for local services with more than 4.3 million users.

How does it work? That online marketplace connects customers who require a particular task to be completed with people willing to complete a task for money. Around 950,000 customers have purchased a service on the e-commerce platform since inception in December 2020.

The ASX share reported that its 'unique paying customers' have grown from around 18,000 in FY15 to approximately 367,000 in FY20. Over that same time period, the average task value went from $97 to $159.

Airtasker managed to raise $83.7 million from investors during its initial public offering (IPO) process at a share price of $0.65. Since then, the Airtasker share price has more than doubled to $1.36 per share. That's a strong debut for the ASX share.

Tristan Harrison has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. owns shares of Reliance Worldwide Limited. The Motley Fool Australia has recommended Reliance Worldwide Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

More on Growth Shares

A female broker in a red jacket whispers in the ear of a man who has a surprised look on his face as she explains which two ASX 200 shares should do well in today's volatile climate
Growth Shares

Top brokers name 3 top ASX growth shares to buy now

Why are brokers feeling bullish on these names? Let's find out.

Read more »

Two plants grow in jars filled with coins.
Growth Shares

3 ASX 200 growth stocks up more than 100% in 1 year that could charge higher

It's been a memorable year for shareholders of these 3 companies.

Read more »

Afterpay share price a happy shopper with a wide mouthed smile holds multiple shopping bags up around her shoulders.
Growth Shares

The pros and cons of buying Zip shares in June

Should investors buy now or wait until later?

Read more »

A smiling woman holds a Facebook like sign above her head.
Growth Shares

3 ASX growth shares I'd buy for the next 10 years

Let's see why these shares could be top picks for the long term.

Read more »

wheelchair user in an office talking on mobile phone
Growth Shares

Why I'd buy this ASX growth share instantly

I’m calling on this stock to deliver strong returns.

Read more »

A happy boy with his dad dabs like a hero while his father checks his phone.
Growth Shares

2 ASX growth shares to buy in June: experts

These businesses have strong growth potential.

Read more »

Rocket powering up and symbolising a rising share price.
Growth Shares

Buy these stellar ASX growth shares with $1,000

Analysts think these shares would be top buys right now.

Read more »

Overjoyed man celebrating success with yes gesture after getting some good news on mobile.
Growth Shares

These ASX growth shares could rise 18% to 30%

Let's see which shares are being tipped to rocket.

Read more »