Insights

2 small-cap ASX shares pushing through lockdown pain

There are gems to be found outside the usual ASX names that you always hear. Here are 2 that the Wilson Asset Management team favour.
The post 2 small-cap ASX shares pushing through lockdown pain appeared first on The Motley Fool Australia. –

During a COVID-ravaged 2021 financial year, Wilson Asset Management portfolio managers reckon the secret to buying ASX shares was picking the stayers.

“Investing in companies that could push through temporary pain to drive top-line growth was key for the WAM Microcap Ltd (ASX: WMI) team,” said Oscar Oberg, Catriona Burns and Matthew Haupt in a memo to clients.

“While the equity market has rallied significantly since the lows of mid-2020, we continue to focus on companies we believe will benefit from a reopening of borders and lockdowns lifting in the medium to long term.”

The WAM Microcap shares themselves have gained more than 32% in the past 12 months, affirming this investment strategy. 

The other secret is to remember there are more than 2,000 companies listed on the ASX. 

This means there are plenty outside the usual large-cap suspects that don’t receive much publicity.

According to the Wilson trio, a cornucopia of initial public offerings meant that they found plenty of those gems.

“Many companies were overlooked or under-researched by investors, creating mispricing opportunities,” said the fund managers.

“These conditions were favourable for our investment process of finding undervalued growth companies with strong fundamentals and a catalyst for a share price re-rating.”

Oberg, Burns and Haupt named 2 ASX shares that WAM Microcap holds that fit the bill:

Plenty of hairy legs after lockdown

Hair removal salon network Silk Laser Australia Ltd (ASX: SLA) only listed on the ASX in December. The Wilson team was impressed with its first full year result.

“Silk Laser Australia beat its FY2021 forecast and upgraded its guidance,” the memo read.

“The company recorded year-on-year revenue growth of 82% and a 129% increase in online sales as digital expansion drove sales growth.”

In June, Silk Laser raised $20 million via new shares to acquire businesses both in Australia and New Zealand to grow its network.

“The deal is set to close in September and we expect it will give Silk Laser Australia a stronger market share on the Australian east coast market with a scaled entry into Victoria and New Zealand.”

Silk Laser shares are up more than 8.3% this year, although its current price of $3.90 is well down on its high of $5.30.

ASX shares for the ‘global video boom’

Video hardware and software maker Atomos Ltd (ASX: AMS) is seeing “rapid adoption” of its ProRes RAW video compression protocol.

“Atomos announced record revenue of $78.6 million for FY2021,” said the Wilson portfolio managers.

“The company also launched several new products during the financial year, including hardware devices and software applications which supported the company’s revenue growth.”

The Wilson team were not the only ones to like what they saw. Atomos shares have rocketed almost 34% since the results a fortnight ago.

Oberg, Burns and Haupt reckon the pandemic has triggered “a global video boom”.

“We remain positive on Atomos as the company continues to find a solid market base for growth, with new products and services already in the making.”

The post 2 small-cap ASX shares pushing through lockdown pain appeared first on The Motley Fool Australia.

Wondering where you should invest $1,000 right now?

When investing expert Scott Phillips has a stock tip, it can pay to listen. After all, the flagship Motley Fool Share Advisor newsletter he has run for more than eight years has provided thousands of paying members with stock picks that have doubled, tripled or even more.*

Scott just revealed what he believes could be the five best ASX stocks for investors to buy right now. These stocks are trading at near dirt-cheap prices and Scott thinks they could be great buys right now.

*Returns as of August 16th 2021

More reading

Why Bigtincan, Lovisa, SILK, & WiseTech shares are charging higher

SILK Laser (ASX:SLA) share price rockets 20% after beating FY21 guidance
Atomos (ASX:AMS) share price soars 16% on FY21 earnings
Wilson Asset Management believes these 2 leading small cap ASX shares are a buy

Motley Fool contributor Tony Yoo has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and has recommended Atomos Ltd. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has recommended SILK Laser Australia Limited. The Motley Fool Australia has recommended Atomos Ltd and SILK Laser Australia Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

Trade The World Anywhere & Anytime!

Mobile app platform with over 50,000 global listed securities across 12 markets (over 70% global market capitalisation), right from your Android or iOS device.

Integrated with exclusive trading idea and investment analysis tools to help you find actionable insight on virtually every financial instrument across our 12 global markets, to help you optimise your trading strategies.

Refer Your Friends

Tell your friends about Monex and gift them FREE access to our trading tools.

We respect your privacy and will only send this one email notification to your friends. 

Share With Your Friends

Share on facebook
Share on twitter
Share on linkedin

Monex Trading Tools Access and Usage Terms

The Monex Trading Tools (referred to as ‘tools’ hereafter) are available to you inside your client portal;


To activate access to the tools, you must have a verified and approved trading account and have made a deposit of at least AUD $1000.


An active and funded account with a positive trading balance is required to continue to have access to the tools;


Although the tools are available to you indefinitely, Monex Securities may at it’s discretion disable access to the tools in the future;


Monex securities reserves the right to change these terms and conditions from time to time, as it sees fit, without notice.

Important Notice
iOS & Android App - 12 International Markets & Over 70% Global Market Cap. $0 Brokerage On US Trades. Click Here!