WiseTech Global Ltd (ASX: WTC) shares are joining the broader rally on the ASX today.
The WiseTech share price is up 1.4% at the time of writing to $46.39 per share.
The company, which provides cloud-based software solutions for international and domestic logistics firms, trades at a price to earnings (P/E) ratio of 135 times.
While that kind of P/E ratio may put some ASX investors off, Elston Asset Management's Bruce Williams points to the company's very strong growth as a reason to buy.
Why this fundie is buying WiseTech shares
Speaking to Livewire Markets, Williams said, "We think WiseTech Global is a good opportunity at these levels. It has started to bounce. We've owned it for a little while so we've readjusted our weighting there."
Williams indicated the pressing need from today's snarled logistics operators is offering tailwinds for WiseTech shares. "It provides software services to logistics, and now more than ever, logistics needs to operate well; it's stressed enough as it is," he said.
Then there's the strong growth trend.
According to Williams:
WiseTech is growing very, very strongly. They've got a lot of the sector as clients and it's a five-year integration program. Or up to five years. They continually build revenue, not only from new client wins but from existing clients as well.
But aren't WiseTech shares a bit pricey?
"The price does worry us. It is something a little outside what we usually pay for assets," Williams conceded.
However, the fund manager thinks the long-term outlook for WiseTech shares is strong, with the company making it difficult for competitors to take away their market share.
According to Williams:
We think they are creating a real moat around what it is they do. We think there are high barriers to entry. We think they have a strong network effect; they are becoming the system to use for any logistics players.
We very much like its long-term prospects and are happy to buy it at these levels.
WiseTech share price snapshot
WiseTech shares posted a tremendous 91% rally in calendar year 2021.
So far, 2022 has been more difficult, with the WiseTech share price down 23% since the opening bell on 4 January.
All up, over the past 12 months WiseTech shares have gained 41%, handily outpacing the 5% gains posted by the S&P/ASX 200 Index (ASX: XJO) over that same time.
