MENU

Is the WiseTech Global Ltd (ASX:WTC) share price good value?

The WiseTech Global Ltd (ASX: WTC) share price has fallen by around 25% during the past month, but I’m not sure it’s good value yet.

Yesterday, the global logistics software business announced the acquisition of Swedish customs and logistics provider, CargoIT.

CargoIT offers customs management solutions along with freight forwarding, warehousing and transportation solutions to over 100 customers including DHL, Mondelez International, Mitsubishi Motors and Hyundai.

The purchase price comprises of $1.8 million upfront and a further potential earn-out of $1.8 million. The business generates annual revenue and earnings before interest, tax, depreciation and amortisation of around $2 million and $0.3 million respectively.

As per WiseTech’s other acquisitions, it said that this is not material to the WiseTech Global group. It highlighted that it has made recent acquisitions in Argentina, Australasia, Belgium, Brazil, Canada, France, Germany, Ireland, Italy, the Netherlands, North America, Spain, Taiwan, Turkey, the UK and Uruguay.

Quite the list, isn’t it? These acquisitions form part of the strategy of “long-term organic growth through targeted valuable acquisitions.”

My worry is that WiseTech has acquired so many businesses over the past two years that there may be some integration problems. I also worry that all these acquisitions may be boosting growth to look better than it is.

Foolish takeaway

Whilst I’m sure CargoWise One is a quality offering for clients, I fear that 85x FY19’s estimated earnings is too high a price to pay for WiseTech in a rising interest environment, although it could do well over the long-term. Although, I admit it is now better value than it was with a share price above $20.

I’d rather buy growth shares at attractive prices like one of these top stocks which serves the growing retirement demographic.

3 Top Growth Shares To Buy This Month

For many, blue chip stocks mean stability, profitability and regular dividends, often fully franked..

But knowing which blue chips to buy, and when, can be fraught with danger.

The Motley Fool’s in-house analyst team has poured over thousands of hours worth of proprietary research to bring you the names of "The Motley Fool’s Top 3 Blue Chip Stocks for FY19."

Each one pays a fully franked dividend. Each one has not only grown its profits, but has also grown its dividend. One increased it by a whopping 33%, while another trades on a grossed up (fully franked) dividend yield of almost 7%.

The names of these Top 3 ASX Blue Chips are included in this specially prepared free report. But you will have to hurry. Depending on demand – and how quickly the share prices of these companies moves – we may be forced to remove this report.

Click here to claim your free report.

Motley Fool contributor Tristan Harrison has no position in any of the 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 Scott Phillips.

The 5 mining stocks we’re recommending in 2019…

For decades, Australian mining companies have minted money for individual investors like you and me. But if you believe the pundits and talking heads on TV, those days are long gone. Finito! Behind us forever…

We say nothing could be further from the truth. To earn the really massive returns, you’ve got to fish where others aren’t fishing—and the mining sector could be primed for a resurgence. That’s why top Motley Fool analysts just revealed their exciting new research on 5 ASX miners they believe could help you profit in 2019 and beyond…

Including:

The best way we see to play the global zinc shortage… Our #1 favourite large-cap miner (hint: it’s not BHP)… one early-stage gold miner we think could hit the motherlode… Plus two more surprising companies you probably haven’t heard of yet!

For free access to our brand-new research, simply click here or the link below. But be warned, this research is available free for a limited time only, and we reserve the right to withdraw it at any time.

Click here for your FREE report!