Wilson Asset Management (WAM) thinks these 2 top ASX shares are a buy

WAM Capital has outlined two ASX shares analysts like the look of.

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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 16.6% per annum since its inception in August 1999, before fees, expenses and taxes. This gross return outperformed the All Ordinaries Total Accumulation Index (ASX: XAO) 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:

Enero Group Ltd (ASX: EGG)

WAM Capital described Enero Group as a global marketing and communication services business that has more than 650 staff across 13 cities around the world.

At the company's recent annual general meeting (AGM) , it provided an a trading update that WAM Capital's fund managers thought was impressive. Growth was ahead of market expectations.

Enero Group's revenue for the three months to September 2021 increased 22.6% year on year to $45.6 million. The ASX share's Hotwire, BMF and OB Media businesses all outperformed.

The fund manager noted that management expects the strong momentum to continue and WAM's analysts believe that the business is trading at a material discount to offshore peers despite stronger growth prospects.

WAM also said that it believes Enero Group's "strong" balance sheet provides ample room for accretive acquisitions in the future. It views the upcoming initial public offering (IPO) of the comparable business System1 in the United States as a valuation re-rating catalyst.

Pact Group Holdings Ltd (ASX: PGH)

Pact Group was described as an Asia Pacific packaging business that manufactures and supplies plastic and metal packaging for a range of trusted brands.

Last month, it released a trading update that showed how the COVID-19 pandemic affected its FY22 first quarter sales. This came at the same time as input costs are increasing with oil prices rising.

The fund manager thinks that the ASX share is trading below its underlying value. WAM believes that Pact Group's long-term strategy, with a focus on increasing recycling capability and reducing inefficiencies, will drive revenue growth and margin expansion in the future.

Takeover battle

WAM Capital also noted that it is currently going through a takeover process to attempt to buy the shares of PM Capital Asian Opportunities Fund Ltd (ASX: PAF).

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.

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