Wilson Asset Management (WAM) has outlined two S&P/ASX 300 Index (ASX: XKO) shares it has invested in which it believes can continue to do well.
WAM runs a number of listed investment companies (LICs). Two of its biggest are WAM Capital Limited (ASX: WAM) and WAM Leaders Ltd (ASX: WLE).
In its latest monthly update, WAM outlined how its portfolios are performing and revealed its thoughts on some holdings, including the two below.
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Jumbo Interactive Ltd (ASX: JIN)
WAM described the ASX 300 share as a business that offers a lottery software platform and management expertise to the charity lottery sector and government.
Last month, the company gave an FY23 outlook update. In this, WAM noted subdued jackpot activity and cost inflation was weighing on Jumbo's short-term earnings outlook.
In response, Jumbo is "taking a disciplined approach to cost management and significantly increasing its price from late May 2023".
Explaining its bullish case for the business, WAM said:
We believe that the demand for Jumbo Interactive's core product offering is relatively inelastic, whereby changes in prices won't drive a material change in customer behaviour, and add to revenue growth and margins into FY24. We remain optimistic on Jumbo Interactive's growth prospects into FY24 as price increases flow through and jackpot activity recovers.
Eagers Automotive Ltd (ASX: APE)
WAM said Eagers Automotive represents a diversified portfolio of automotive brands across Australia and New Zealand. The ASX 300 share owns and operates motor vehicle dealerships, sells new and used vehicles, and facilitates automotive services.
The fund manager noted Eagers Automotive provided an update at its annual general meeting (AGM). It outlined a number of challenges the company is facing in the current operating environment, such as port congestion, biosecurity issues, and cost pressures that are being seen across the broader economy.
The Eagers share price dropped after the update, but the WAM investment team was pleased to see the ASX 300 share is continuing to see strong demand for new and used vehicles. They also like that the company delivered an underlying operating profit before tax of $405.2 million in 2022.
Discussing some of its optimism about the company, WAM said:
Eagers Automotive reiterated its forecast growth in revenue of approximately $1 billion for 2023, driven by acquisitions of car dealership groups in the ACT and South Australia, and momentum from new electric car brands BYD and Cupra. We continue to see upside in the value of the company and remain confident in its ability to execute its 2023 forecast.
