A leading fund manager is excited by these 2 undervalued ASX shares

Here's why investors can feel bullish about these stocks.

| More on:
Smiling couple looking at a phone at a bargain opportunity.

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

The ASX share market can be a great place to find businesses that have strong growth outlooks. Those companies could be giants worth tens of billions of dollars on the ASX or a fraction of that scale. Pleasingly, a leading fund manager has identified two businesses that are viewed as undervalued ASX shares.

In this article, the two stocks we're going to look at are within the WAM Research Ltd (ASX: WAX) portfolio, which is a listed investment company (LIC). The investment team at Wilson Asset Management are looking for the most compelling, undervalued growth opportunities in the Australian market.

With that in mind, let's look at the two ASX shares that WAM has picked out.

EVT Ltd (ASX: EVT)

WAM noted that EVT operates cinemas, hotels, restaurants, and resorts in Australia, New Zealand, Germany, and Singapore.

The company released its FY25 half-year result in February, which included normalised operating profit (EBITDA) of $99.6 million, a 3.7% increase from the prior year. Normalised net profit after tax (NPAT) grew 8.3% year over year to $31.5 million.

WAM believes the undervalued ASX share's property portfolio, valued at approximately $2.3 billion, remains a solid asset base. The investment team also noted that its entertainment division "continues to perform strongly".

Explaining why WAM is bullish on the business, the fund manager explained:

We are excited by the growth outlook in the company's entertainment segment with a strong lineup of blockbuster films to drive FY2026 performance.

Generation Development Group Ltd (ASX: GDG)

The second business that WAM talked about is Generation Development Group, which the fund manager described as a diversified financial services company with notable positions in the investment bonds, lifetime annuities, and research and ratings sectors through its brands Generation Life and Lonsec.

The investment team noted that in February, the company announced the acquisition of Evidentia Group, a leading provider of investment management and tailored managed account solutions, for $320 million.

WAM believes this acquisition solidified the business' position as a "market leader" in the managed accounts sector, with combined funds under management (FUM) of more than $25 billion.

On top of that, the fund manager noted the undervalued ASX share delivered a "strong" FY25 interim result, with revenue rising by 198% and underlying net profit after tax (NPAT) growing 152% year over year. The fund manager believes this provides a "compelling outlook for the year".

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 recommended Generation Development Group. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

More on Cheap Shares

Broker working with share prices on computers.
Cheap Shares

Why UBS thinks Magellan shares could deliver a 15% return in the next year

The broker is excited about this stock.

Read more »

Happy work colleagues give each other a fist pump.
Cheap Shares

Morgans names 2 cheap ASX 200 shares to buy

The leading broker thinks these shares are being undervalued by the market.

Read more »

Happy couple looking at a phone and waiting for their flight at an airport.
Cheap Shares

2 ASX 300 shares to buy this month: experts

These stocks could be leading opportunities according to one expert.

Read more »

A senior investor wearing glasses sits at his desk and works on his ASX shares portfolio on his laptop2
Cheap Shares

Is this beaten-up stock the best value buy in the ASX 200?

An expert has outlined why this stock is an attractive opportunity.

Read more »

A woman smiles as she sits on the bus using her phone and listening to music through headphones.
Cheap Shares

2 compelling ASX shares on sale right now

These businesses look like low-priced opportunities.

Read more »

Smiling man sits in front of a graph on computer while using his mobile phone.
Cheap Shares

2 ASX shares that I rate as cheap buys after the market rally

I still rate these stocks as bargain buys after shares recovered from April’s sell-off.

Read more »

A woman sits in a quiet home nook with her laptop computer and a notepad and pen on the table next to her as she smiles at information on the screen.
Cheap Shares

Is it time to buy these 2 beaten-up ASX shares in 2025?

I’m bullish about these two ASX shares that have gone through a sell-off.

Read more »

Two workers on site discuss the next stage of this civil engineering job, one points his hands upwards.
Cheap Shares

2 ASX 200 shares this fund manager thinks are trading at great value

These large industry players are good value.

Read more »