The investment team at Wilson Asset Management (WAM) has picked out some ASX shares that could be undervalued and prime buying opportunities.
WAM runs a number of different listed investment companies (LICs) including WAM Research Limited (ASX: WAX) and WAM Active Limited (ASX: WAA) which looks to find undervalued opportunities on the ASX share market.
In the latest monthly update, WAM revealed two of its leading ideas which could produce outperformance.
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Tourism Holdings Ltd (ASX: THL)
WAM described this ASX share as a global tourism operator and the largest commercial recreational vehicle rental operator in the world.
The fund manager pointed out that the company announced "strong" FY23 half-year results and "record guidance", which revealed that it now expects an improved underlying net profit after tax (NPAT) to be "above NZ$75 million".
WAM said that the guidance was "reflective of the strong trading in the first half of FY23 and a positive outlook for the remainder of FY23". The fund manager explained its positive outlook for the business:
We continue to remain positive on Tourism Holdings' outlook as the tourism industry continues to recover and the business benefits from synergies following the merger with Apollo Tourism & Leisure.
Temple & Webster Group Ltd (ASX: TPW)
The fund manager described the ASX share as a pure play online retailer of furniture and homewares.
Last month, Temple & Webster released its FY23 half-year result, with revenue of $207 million, which was down year over year from $235.4 million in FY22. WAM also pointed out that the company noted that sales in the first five weeks of the 2023 calendar year were also down by 7%.
The fund manager pointed out that the negative result and overall market sentiment led to a decline of the Temple & Webster share price, which fell around 27% on the day of the report announcement.
WAM said:
Despite the slowing growth in home goods retail, we believe Temple & Webster Group remains in a great position to leverage the long-term opportunity to expand into the e-commerce space in the Australian furniture and homewares sector.
Temple & Webster also recently launched a share buyback of up to $30 million.
