Bell Potter thinks WiseTech Global Ltd shares are a good buy

Credit: Thomas of Tortuga

Shares of WiseTech Global Ltd (ASX: WTC) have rocketed higher by around 6% today after a research note by Bell Potter revealed the broker had upgraded the company’s shares to a buy rating with a $5.90 price target.

The company which provides software solutions to the logistics industry has only been listed since April, but has already steadily risen in value by over 40%.

I’m a big fan of WiseTech Global and believe its software CargoWise One is an invaluable asset for logistics companies in an increasingly complex industry which is growing at a rapid clip thanks to the rise in online shopping.

The CargoWise One software is designed to remove some of this complexity and make the shipping process more efficient by providing a single platform for all parts of the logistics process.

According to IbisWorld, online shopping grew at an average of 14.6% per annum in the last five years. I believe this level of growth could continue for some time to come, making it ever more important that logistics companies become more efficient.

The good news for shareholders is that its software appears to be hitting the mark with users. The company has reported a churn rate of just 0.4%, which is very impressive in my opinion. I feel not only does this mean lots of happy customers spreading the word, it also gives this growing company a firm foundation on which to grow from.

Right now I would say WiseTech Global is up there with fellow software company Aconex Ltd (ASX: ACX) as one of the best tech investments you could make. Whilst it might trade at a premium to the rest of the S&P/ASX 200 (Index: ^AXJO) (ASX: XJO), it certainly has strong growth prospects backing this up.

Even after today’s gains the price target that Bell Potter has slapped on its shares implies upside in the region of over 8%. But should you invest? If you’re happy to buy and hold its shares, then I would say this would be a great addition to your portfolio today.

Lastly, if you decide to invest in WiseTech Global then I would first recommend having a look to see if you own one of these three rotten ASX shares. Each could be doing more harm than good and could be best being swapped out if you ask me.

3 Rotten Shares to Sell, and 1 to Buy Today

After a double-digit rally for the ASX since 2016 lows, investors should be on high alert. You'll find a full rundown below of 3 shares we think you should avoid today plus one top pick worth buying, even if the market turns south and the RBA keeps rates at an "emergency low." Simply click here to uncover these stocks.

Motley Fool contributor James Mickleboro has no position in any stocks mentioned. The Motley Fool Australia owns shares of WiseTech Global. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

Two New Stock Picks Every Month!

Not to alarm you, but you’re about to miss a very important event! Chief Investment Advisor Scott Phillips and his team at Motley Fool Share Advisor are about to reveal their latest official stock recommendation. The premium “buy alert” will be unveiled to members and you can be among the first to act on the tip.

Don’t let this opportunity pass you by – this is your chance to get in early!

Simply enter your email now to find out how you can get instant access.

By clicking this button, you agree to our Terms of Service and Privacy Policy. We will use your email address only to keep you informed about updates to our website and about other products and services we think might interest you. You can unsubscribe from Take Stock at anytime. Please refer to our Financial Services Guide (FSG) for more information.