The WiseTech Global Ltd (ASX: WTC) share price has been the strongest performer on the ASX 200 on Tuesday.
In afternoon trade the provider of software solutions to the logistics industry has seen its share price rise almost 6.5% higher to $21.25.
Today’s gain means that WiseTech Global’s shares are now up 25% this year.
Why is the WiseTech Global share price charging higher?
With no news out of the company or broker notes that I’m aware of, today’s big move is a bit of a mystery. However, there are a couple of potential catalysts that could have led to the rampant buying today.
One is the strong performance of U.S. tech shares on the Nasdaq index overnight. WiseTech Global has a tendency to move in line with its U.S. counterparts. So, with the Nasdaq rising 2% on Monday, its shares were always likely to move higher today.
So, perhaps the catalyst for the buying has been its share price underperformance over the last three weeks.
Although WiseTech Global’s shares are up 25% year to date, prior to today they were down 15% from their 2019 high of $23.39. Some investors may have thought that the selling of its shares since its half year results had been overdone and created a buying opportunity.
Should you invest?
I’m a massive fan of WiseTech Global and believe it has the hallmarks of being a fantastic buy and hold investment. However, I do feel its shares are about fair value now and are unlikely to climb notably higher from here in the short term.
This is a view I share with analysts at Morgan Stanley and Citi. Both brokers are positive on the company but have price targets of $20.00 and $21.31, respectively, on its shares.
As a result, I would only buy its shares if you’re prepared to make a long-term and patient investment.
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Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of Altium, WiseTech Global, and Xero. 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.