Wilson Asset Management (WAM) runs several listed investment companies (LICs) that have outperformed their respective benchmarks. The fund manager has named two S&P/ASX 200 Index (ASX: XJO) shares that could be primed to deliver good performance.
WAM looks for growing businesses where the investment team see a catalyst that could boost the valuation.
Let's look at two ASX 200 shares in the portfolios of WAM Research Limited (ASX: WAX) and WAM Active Limited (ASX: WAA).
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Viva Energy Group Ltd (ASX: VEA)
WAM described Viva Energy as a leading energy company that reportedly supplies around one-quarter of Australia's fuel requirements.
The fund manager highlighted Viva Energy's July operational update, which revealed its unaudited financial result for the six months to 30 June 2023. This included an 11.5% increase in total sales volumes year over year.
A recovery in international travel and the resources, marine and wholesale sectors was the predominant factor in driving the increase, according to WAM.
Viva Energy expects earnings before interest, tax, depreciation and amortisation (EBITDA) will be approximately $360 million, with the retail and commercial division beating market expectations.
Explaining its reasons for backing the company, the fund manager said:
Over the medium-term, we remain positive on the outlook on Viva Energy Group as the business is set to convert over 700 Coles Express stores to the highly profitable On the Run brand which dominates the South Australian market.
Megaport Ltd (ASX: MP1)
The fund manager described this ASX 200 share as a network service provider which enables customers to connect their network to cloud services, managed services and data services.
In July, Megaport upgraded its normalised EBITDA guidance for FY23 to a range of $19 million to $21 million. The former guidance was $16 million to $18 million.
The ASX 200 tech share also provided some expectations about FY24. It expects EBITDA in FY24 to be higher than the previous guidance of $41 million to $46 million.
Megaport has decided to terminate its $25 million HSBC debt facility, which will help reduce costs.
Revealing its positive thoughts about the business, WAM said:
We are pleased to see the strong upgraded guidance and look forward to the release of the company's FY2023 results. We believe the new earnings guidance presented by management in the results announcement will outperform market expectations.
