The WiseTech Global Ltd (ASX: WTC) share price hit a record high of $7.20 today as investors continue to bid the company's value higher after its May 3, 2017, presentation at the Macquarie Australia Conference.
Since the presentation to institutional investors the stock has climbed around 25% in a textbook sign that WiseTech's CEO and founder Richard White impressed institutional investors in selling the company's growth potential.
WiseTech is an industry leading software-as-a-service provider for the global logistics industry that has grown its revenues at a 39% compound annual growth rate from H1 2015 to H1 2017. This meant it posted a net profit of $14.4 million on $71.1 million in revenue for the first half and also declared an interim dividend of 1 cent per share.
The CEO is guiding for WiseTech to deliver a full year operating profit (EBITDA) between $50 million to $53 million on full year revenues of $148 million to $155 million.
For the first half of 2017 the company posted 4.9 cents in earnings per share which means at $7.20 it trades on around 73x annualised earnings, which may not be as expensive as it sounds when you take into account the company's gangbusters growth and strong outlook.
I'm kicking myself for missing out on the rise of WiseTech over the last 18 months, although dismissing some stocks on the basis they are too expensive can leave you locked out of the market's best growth stories. Needless to say WiseTech is towards the top of my shopping list and I think it should be for other growth-oriented investors.
Another tech-related stock that has seen its share price travel in the opposite direction to Wisetech recently is sports analytics business Catapult Group International Ltd (ASX: CAT).
It is also a market leader, but in the large and lucrative professional sports industry. The shares have fallen 25% over the course of 2017 after the company revealed a weaker-than-expected quarter ending March 31 2017 and conducted a capital raising. It looks a high risk / high reward play that could crush the market over the next five years. Shares closed at $1.85 and could be a real opportunity at these levels, but I would only invest a very small part of my portfolio in this business as it remains speculative.
