ASX microcap stocks have been performing particularly well for Wilson Asset Management.
In fact, of Wilson’s seven ASX Listed Investment Companies, its Microcap fund (ASX:WMI) has performed the best, up 83 per cent in the last year and 12 per cent in 2021 to date.
| Code | Company | Price | %Yr | %YTD | MktCap |
|---|---|---|---|---|---|
| WGB | WAM Global Limited | 2.61 | 48 | 9 | $560.6M |
| WMI | WAM Microcap Limited | 2.09 | 83 | 12 | $448.5M |
| WLE | WAM Leaders Limited | 1.53 | 43 | 11 | $1.3B |
| WAX | WAM Research Ltd | 1.69 | 41 | 9 | $328.1M |
| WMA | WAM Alternative | 1.01 | 40 | 5 | $192.9M |
| WAM | WAM Capital Limited | 2.25 | 8 | 1 | $2.0B |
| WAA | WAM Active Limited | 1.1 | 19 | -4 | $76.8M |
The Microcap fund has $352 million in listed entities; arguably the most noteworthy of its top 20 is Chalice Mining (ASX:CHN).
It also holds a few niche retail plays in Dusk Group (ASX:DSK), The Reject Shop (ASX:TRS) and Silk Laser (ASX:SLA) as well as diagnostic imaging play Capitol Health (ASX:CAJ).
One singled out stock was Enero Group (ASX:EGG) which owns a network of PR and communications firms.
“We are positive on Enero as it has strong exposure in US technology companies via its public relations company Hot Wire and a digital platform for advertising, OB Media which continues to perform strongly,” it said.
“We believe Enero is currently trading at a relatively cheap valuation, has a strong balance sheet and will benefit from future earnings accretive acquisitions.”
Another ASX microcap stock singled out – but not for the right reasons – was workplace protection equipment maker Cleanspace (ASX:CSX) which has actually been a poor performer this year.
Shares were smashed after a sales update in March that fell short of investor expectations.
Wilson told investors it had exited its position in the company although it noted the announcement was a negative “surprise”.
Other LICs ASX investments
Two of Wilson’s LICs – WAM Active (ASX:WAA) and WAM Capital (ASX:WAM) – invested in Airtasker (ASX:ART).
While the online market place which only listed on the ASX last month it has a history going back to 2012 and it’s strong growth over that time was singled out.
Its unique paying customers grew from 18,000 to 367,000 in the last five years and the average task value had grown from $97 to $159.
Another recent listee was construction equipment and services provider Maas Group (ASX:MGH) which listed in December. Wilson was impressed by its first financial result as a listed company and expected more to come.
“We anticipate continued growth over the next four to five years as both state and federal governments have committed to large amounts of infrastructure spending, including record expenditure committed by the New South Wales state government for regional areas,” it said.
“Low interest rates, government support and improved customer confidence should also benefit regional housing markets in 2021.”
Moving from microcaps to large caps and one other ASX stock given a hat tip was Link (ASX:LNK) – a company that offers financial administration software.
It has recently expanded into property settlements – taking a 44 per cent stake in Property Exchange Australia (PEXA).
“PEXA has over 75 per cent market share in conveyancing in Australia and we are positive on the ability of the technology to expand globally,” it said.