Why a top fund manager thinks this ASX share is such an exciting stock to own

Leading fund managers from Wilson Asset Management have picked out the ASX share Generation Development Group Ltd (ASX: GDG) as one of the appealing businesses on the ASX to own.

This company was one of the positions in the WAM Research Ltd (ASX: WAX) portfolio during its pleasing rise in July. WAM Research is a listed investment company (LIC) that aims to invest in the "most compelling undervalued growth opportunities in the Australian market".

Let's look at why Generation Development Group fits the bill for the WAM investment team.

What's appealing about the ASX share?

WAM said that Generation Development Group is a diversified financial services company providing investment bonds and lifetime annuities, managed-account solutions, and investment research and ratings.

The fund manager noted that the Generation Development Group share price was a contributor to the investment portfolio performance during the month after its June 2026 quarter update exceeded expectations across each of its key growth businesses.

WAM noted that the ASX share's investment bond sales reached a record $442 million, approximately 8% ahead of forecasts, while net inflows of $341 million were also stronger than expected.

Managed accounts delivered total net inflows of $3.5 billion, including approximately $1.8 billion of underlying flows, excluding mandates, which indicated to the WAM investment team that there is improving organic momentum and a strengthening client pipeline.

The fund manager also noted that positive market movements also supported funds under management (FUM), with Evidentia closing the quarter at $40.5 billion and Generation Life at $5.95 billion.

Additionally, Lonsec's research and ratings division increased the number of products under research by 9% over the year, while growing interest in the recently launched investment governance solutions offering provided further confidence in FY27 sales growth.

In WAM's eyes, broad-based results reinforced the ASX share's structural growth outlook and prompted positive earnings revisions.

What is the Generation Development Group valuation?

According to the forecast on CommSec, the business is projected to generate 11.4 cents of earnings per share (EPS) in the 2026 financial year. That implies it's currently valued at 34 times FY26's estimated earnings.

EPS is then forecast to increase by 21% to 13.8 cents in the 2027 financial year. If the business does deliver that profitability, then it would be valued, at the time of writing, at 28 times FY27's estimated earnings.

The projection on CommSec also suggests the business could hike its annual dividend per share to 4 cents in FY26 and 5.5 cents in FY27. But, these are not guaranteed payouts, just analyst projections.

At the rate it's growing and the appealing share price decline of around 50% since mid-October 2025, this could be an interesting ASX share to look at, among other compelling ideas.

The post Why a top fund manager thinks this ASX share is such an exciting stock to own appeared first on The Motley Fool Australia.

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.

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