Here are 6 ASX stocks that helped WAM Capital beat the market by more than 5%

Nick Sundich Nick Sundich, February 23, 2024

WAM Capital (ASX:WAM) is one of several Listed Investment Companies (LICs) operated by Wilson Asset Management. Wilson Asset Management is headed by one of Australia’s most successful investors in Geoff Wilson, and it has showed in its results. The fund made a pre-tax profit of $148.7m and a post-tax profit of $106.5m. It is paying an interim dividend of 7.75c per share, yielding nearly 10% on an annualised basis – although only 60% of this is franked. This all due to a solid performance, above and beyond the markets.

Since January 2020, the portfolio rose 6.8% per annum and has grown 11.6% in 1HY24 alone, the latter figure beating the market by 5.2% (the ASX Small Ords Accumulation Index). When January 2024 is added onto 1HY24, the portfolio has gained 14%, beating the Small Ords Accumulation Index by 6.6%.

What stocks propelled this? Although WAM Capital did not reveal the full list of stocks it owns, here are some of its largest.

 

Source: WAM Capital 1HY24 results release

 

6 ASX stocks that helped WAM Capital beat the market by more than 5%

Tuas (ASX:TUA)

Telstra, move over. While our home-grown Telco is down 7% in the past year, Tuas has more than doubled and is now nearly worth $1.5bn. The Singapore-focused telco has had little news since its FY23 results, released in September, although these were nothing to be snuffed at, with 50% revenue growth and 101% pre-tax profit growth.

 

Light and Wonder (ASX:LNW)

Some US stocks listing down under have been absolute duds – like Limeade. But this listing has been successful. This company, based in Las Vegas, has a diverse business in the gambling industry and has been listed on the Nasdaq for several years. Why is it listed down under? It claimed because of interest from Australian fund managers that could only invest in Australian-listed shares. And they knew, with a more mature gaming industry here, that investors understood the industry. The stock is up just over 50% since its listing in May last year.

 

Sigma Healthcare (ASX:SIG)

Sigma Healthcare is a network of pharmaceutical wholesalers and distributors. The key catalyst for its share price growth has been a proposed deal from Chemist Warehouse that will create an $8.8bn giant and see the later company realise its long-held ambitions to be listed on the ASX.

It remains to be seen what WAM will do once the deal closes – will it cash out, or retain ownership? Either way, it could open up more opportunities for the fund, and others too, as it may inspire other companies to dip their toes in the IPO market.

 

TechnologyOne (ASX:TNE)

Up 14% in the last year and 123% in 5 years, this company just keeps getting bigger and bigger – all to the benefit of WAM Capital and other long-term shareholders.

TechnologyOne is a tech stock specialising in Enterprise resource planning (ERP) software with a focus on the education and government.

It has over 800 large scale enterprise organisations, with millions of users, as clients. Beyond the dozens of councils it has helped, other clients include Queensland Rugby League, the Te Papa Museum in New Zealand and several universities. Its products perform several tasks for customers including reducing costs, improving efficiency and streamlining processes.

 

Viva Energy (ASX:VEA)

Talk about being in the right place at the right time…Viva Energy (ASX: VEA) is one of the largest energy companies in Australia, supplying about 25% of the country’s need for liquid fuel. Fuel prices took off after Russia invaded Ukraine and have remained higher than pre-COVID levels. This has shown in Viva’s results, as well as in its share price.   

 

NextDC (ASX:NXT)

We all know data centre demand is on the way up, but how to play it on the ASX? This company, the biggest data centre stock on the ASX and the second biggest in Oceania after Equinix, is not the only way, but seemingly the best way.

It listed in 2010, raising $40m at $1 per share in a deal valuing the company at $80m. But now, the share price is over $15, and with capital raisings those original shares are worth only 15c today, representing 100-fold growth.

Despite being well established in Australia, it is making its first steps overseas, currently building centres on Kuala Lumpur and Auckland, as well as planning for ones in Singapore and Japan.

 

So there you have it, how WAM Capital beat the market!

 

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