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WTC - WiseTech Global
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Thanks tinhat. Do they offer a price target for fair value given the deteriorating financial health? Bell Potter's recent report maintains WTC as a Sell with a 12 mth PT of $17.50.
The results appeared quite solid despite the higher net interest and amortisation expenses.
tinhat
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Could any one please provide his/her opinion on the rights placed by WTC at only 2% discount $20 about and market price is still $23. Normally on CR announcement market goes south.
I was referring to previous postings on WTC including how Bell Potter price target for WTC was $17. But digging into their research notes, I found interestingly BP has been consistent to declare WTC as a sell and ironically market did not oblige them.
Please refer some snips .
BP reported on 20 March WTC as a sell still with price target of $20 when market price was $20. Is it some sort of vendetta they have considering they have been consistent sell rating on WTC even back in Sept 2017, they predicted a price target of $8 when market price was $8.85. Both extracts are pasted here.
I knew when BP was dead against of FMG in every forum to be an useless share. I remember Quint's lecture some 6 years (?) in Perth. He mentioned DONT TOUCH FMG but stock market did not listen and you do not need me to lecture on FMG.
I partially off loaded WTC earlier and thinking of committing on the share rights. Like to hear from you and your experience on this.
Knobby22
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It appears to me a good company, the question is whether it is overpriced. Just because Bell think its a little overpriced short term doesn't mean long term it won't still do well. Don't forget Bell have discounted for risk. If you can't see the risk then the discount doesn't apply and the present price is fair under their evaluation. the prediction is that eps will be double in two years time which is a pretty good growth rate.
Dividends will more than double. the problem is that the price is very high P/E of 134 so the growth needs to be fabulous. it hasn't got any debt also which is good.
I think the company is a little bit priced for perfection. I worry that it is too easy to compete against (that is not much of a moat).
I normally think you should take the rights purely as you will be diluted unfavourably but
what are they going to do with the cash? Takeover? I think it all depends how good you think management is. Tough one.
I don't own (more fool me as price doubled).
Dividends will more than double. the problem is that the price is very high P/E of 134 so the growth needs to be fabulous. it hasn't got any debt also which is good.
I think the company is a little bit priced for perfection. I worry that it is too easy to compete against (that is not much of a moat).
I normally think you should take the rights purely as you will be diluted unfavourably but
what are they going to do with the cash? Takeover? I think it all depends how good you think management is. Tough one.
I don't own (more fool me as price doubled).
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thanks @Knobby22 for sharing your thought and view. They are useful to see from another angle than just my own.
Only I would say about Bell that their predicted prices have constantly upped since 2017 but their ranking of sell has been consistent. So my query was why Bell kept on moving up their price target.
PE ratio is absolutely horrendous and being a tech stock, the puncture to the balloon would be horrendous.
Let me read what other posters are saying.
bigdog
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WTC is reporting 2019 Full Year Accounts tomorrow August 21
ASX announcement yesterday
19/08/2019 11:58:36 AM WTC acquires US container yard solutions, Depot Systems
WiseTech announced the acquisition of a US-based container yard and terminal management logistic solution company for $4.4 million upfront.
Depot Systems is a leading provider of container yard management, maintenance and repair estimating, with WiseTech paying $4.4 million with a further multi-year earn-out potential of $2.7 million."
Depot Systems is a leading provider of container yard management, maintenance and repair estimating, with WiseTech paying $4.4 million with a further multi-year earn-out potential of $2.7 million.
Share price did have high of $27.92 up 0.64 cents earlier today
893
ASX announcement yesterday
19/08/2019 11:58:36 AM WTC acquires US container yard solutions, Depot Systems
WiseTech announced the acquisition of a US-based container yard and terminal management logistic solution company for $4.4 million upfront.
Depot Systems is a leading provider of container yard management, maintenance and repair estimating, with WiseTech paying $4.4 million with a further multi-year earn-out potential of $2.7 million."
Depot Systems is a leading provider of container yard management, maintenance and repair estimating, with WiseTech paying $4.4 million with a further multi-year earn-out potential of $2.7 million.
Share price did have high of $27.92 up 0.64 cents earlier today
893
Garpal Gumnut
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I must admit to knowing nothing about this stock but a near 2 fold increase in price of 3 years cannot be ignored.
From my tech perspective this stock is headed for $20.
It seems to being pushed atm by brokers or instos wishing to get out.
It is a classical 1-2-3 case which would fit in with Bell's anticipation of a $20 price or thereabouts.
I trust this chart explains my TA on this stock.
$20 or thereabouts is support and resistance.
gg
bigdog
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ASX announcements
17/10/2019 1:41:48 PM 2 Trading Halt (PDF 214.1 KB)
17/10/2019 12:18:28 PM Pause in Trade
This morning J Capital released a report claiming that WiseTech Global is overstating its profits.
The short seller estimates “that overstated profit in the three years since WiseTech listed may be as high as $116 million. That would be an overstatement of 178%.”
After obtaining financial fillings of its European subsidiaries, J Capital has doubts over its European business. It alleges that the company’s “European revenues were overstated by as much as $48 mln in FY 2018.”
Today had a low of $28.93 and stopped trading at midday
470
17/10/2019 1:41:48 PM 2 Trading Halt (PDF 214.1 KB)
17/10/2019 12:18:28 PM Pause in Trade
This morning J Capital released a report claiming that WiseTech Global is overstating its profits.
The short seller estimates “that overstated profit in the three years since WiseTech listed may be as high as $116 million. That would be an overstatement of 178%.”
After obtaining financial fillings of its European subsidiaries, J Capital has doubts over its European business. It alleges that the company’s “European revenues were overstated by as much as $48 mln in FY 2018.”
Today had a low of $28.93 and stopped trading at midday
470
bigdog
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WTC ASX announcement after close on Friday October 18
18/10/2019 4:41:25 PM WTC responds to misinformation in the market
refer file uploaded to read responses to the key allegations
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These short raids are really becoming a thing.
I like WTC's reply and I think they've gone about it the right way, still wouldn't suprise me if they get sold off Mo day though
I like WTC's reply and I think they've gone about it the right way, still wouldn't suprise me if they get sold off Mo day though
bigdog
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https://www.theage.com.au/business/...battle-with-tech-darling-20191021-p532qn.html
Short seller fires second torpedo in bloody battle with tech darling
Elizabeth Knight
October 22, 2019
If there is enough smoke billowing from a company that investors can’t actually see what’s going on then there doesn’t need to be a fire to justify selling. And this is precisely why shares in one of Australia’s tech darlings, WiseTech, have fallen more than 22 per cent over its past two trading sessions.
The first scramble for the exit was triggered by a scathing report from hedge fund J Capital in which it contended WiseTech, a logistics software company, had inflated its revenues and its assets
This report landed on Thursday prompting WiseTech to halt share trading on Friday so that it could refute J Capital’s findings.
But no sooner than WiseTech had responded to the report and the shares started trading on Monday morning, J Capital released is second torpedo, which picked holes in WiseTech’s attempted repudiation and found a new avenue of attack.
This time the short seller homed in on WiseTech’s history of poor acquisitions and alleged the logistics software group had misled investors on the real rates of customer attrition from its main product CargoWise.
The shares were hit a second time - down another 12 per cent in an hour. Once again WiseTech halted trading in order to respond to the latest salvo.
The hapless investors that may have wanted to sell can do little but strain their necks as they watch the two combatants, that are locked in a high stakes argument, lob insults back and forth.
And with so much smoke it is extremely difficult for shareholders to know who to believe.
Even if WiseTech’s accounts are pristine there remains one logical reason that investors should be concerned. The stock is trading on a price-earnings multiple of almost 150 times which means it is wildly expensive.
This company listed in 2016 for $3.35 a share and until last week was trading at more than $33.
When a company is priced at these nose-bleed levels there can be no room for error. These companies need to grow revenue or profit exponentially to justify the share price.
Any suggestions that profit or revenue have been pumped by accounting treatment would be a concern.
In WiseTech’s case its aggressive acquisition strategy, which has seen the company invest $400 million on new businesses over the past three years, could be considered a red flag, particularly to short sellers.
Although this may not be a problem in and of itself, rapid-fire acquisitions can cloud the picture for investors who are unable to read through comparisons from one year to the next.
Excessive growth through acquisitions can also result in indigestion and execution risk.
We believe that when WiseTech slows or stops acquisitions, shareholders will realise they own a motley global collection of small, poorly-integrated companies with dispirited staff.
Another in any short seller’s repertoire of red flag issues is executives/directors/founders selling shares. There has been a bit of this going on which isn’t a great sign but most still own a reasonable chunk of stock.
All of these features mean that WiseTech is ripe picking for a short seller - regardless of whether the concerns are legitimate.
And history shows that plenty of these kinds of highly critical reports unearth some major problems within companies.
Not all have been life-threatening but they have had a major impact on the value of their shares.
J Capital is running the argument that WiseTech’s strategy to growth through acquisition is flawed.
It describes as "bollocks" comments made by WiseTech chief executive Richard White on a recent earnings call that, "Our acquisitions are strategic, not revenue roll-ups. We are building highly efficient and scalable mini WiseTechs with significant market positions and key customer bases across the world".
J Capital says that because the companies WiseTech acquires don’t produce the desired results, it just accelerates acquisitions to keep the growth narrative going.
"We believe that when WiseTech slows or stops acquisitions, shareholders will realise they own a motley global collection of small, poorly-integrated companies with dispirited staff," J Capital says.
It’s a big call but one that has inflicted a couple of billion dollars in value damage in two days.
Short seller fires second torpedo in bloody battle with tech darling
Elizabeth Knight
October 22, 2019
If there is enough smoke billowing from a company that investors can’t actually see what’s going on then there doesn’t need to be a fire to justify selling. And this is precisely why shares in one of Australia’s tech darlings, WiseTech, have fallen more than 22 per cent over its past two trading sessions.
The first scramble for the exit was triggered by a scathing report from hedge fund J Capital in which it contended WiseTech, a logistics software company, had inflated its revenues and its assets
This report landed on Thursday prompting WiseTech to halt share trading on Friday so that it could refute J Capital’s findings.
But no sooner than WiseTech had responded to the report and the shares started trading on Monday morning, J Capital released is second torpedo, which picked holes in WiseTech’s attempted repudiation and found a new avenue of attack.
This time the short seller homed in on WiseTech’s history of poor acquisitions and alleged the logistics software group had misled investors on the real rates of customer attrition from its main product CargoWise.
The shares were hit a second time - down another 12 per cent in an hour. Once again WiseTech halted trading in order to respond to the latest salvo.
The hapless investors that may have wanted to sell can do little but strain their necks as they watch the two combatants, that are locked in a high stakes argument, lob insults back and forth.
And with so much smoke it is extremely difficult for shareholders to know who to believe.
Even if WiseTech’s accounts are pristine there remains one logical reason that investors should be concerned. The stock is trading on a price-earnings multiple of almost 150 times which means it is wildly expensive.
This company listed in 2016 for $3.35 a share and until last week was trading at more than $33.
When a company is priced at these nose-bleed levels there can be no room for error. These companies need to grow revenue or profit exponentially to justify the share price.
Any suggestions that profit or revenue have been pumped by accounting treatment would be a concern.
In WiseTech’s case its aggressive acquisition strategy, which has seen the company invest $400 million on new businesses over the past three years, could be considered a red flag, particularly to short sellers.
Although this may not be a problem in and of itself, rapid-fire acquisitions can cloud the picture for investors who are unable to read through comparisons from one year to the next.
Excessive growth through acquisitions can also result in indigestion and execution risk.
We believe that when WiseTech slows or stops acquisitions, shareholders will realise they own a motley global collection of small, poorly-integrated companies with dispirited staff.
Another in any short seller’s repertoire of red flag issues is executives/directors/founders selling shares. There has been a bit of this going on which isn’t a great sign but most still own a reasonable chunk of stock.
All of these features mean that WiseTech is ripe picking for a short seller - regardless of whether the concerns are legitimate.
And history shows that plenty of these kinds of highly critical reports unearth some major problems within companies.
Not all have been life-threatening but they have had a major impact on the value of their shares.
J Capital is running the argument that WiseTech’s strategy to growth through acquisition is flawed.
It describes as "bollocks" comments made by WiseTech chief executive Richard White on a recent earnings call that, "Our acquisitions are strategic, not revenue roll-ups. We are building highly efficient and scalable mini WiseTechs with significant market positions and key customer bases across the world".
J Capital says that because the companies WiseTech acquires don’t produce the desired results, it just accelerates acquisitions to keep the growth narrative going.
"We believe that when WiseTech slows or stops acquisitions, shareholders will realise they own a motley global collection of small, poorly-integrated companies with dispirited staff," J Capital says.
It’s a big call but one that has inflicted a couple of billion dollars in value damage in two days.
bigdog
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https://www.theage.com.au/business/...-by-short-seller-hit-job-20191022-p53319.html
WiseTech backers unconvinced by short seller 'hit job'
By Colin Kruger
October 23, 2019
One of WiseTech's earliest institutional shareholders has sprung to the defence of the logistics software company, while a market analyst dismissed the allegations levelled at the firm by J Capital Research as a 'hit job'.
WiseTech shares remain halted as the company prepares to respond to the second incendiary report from Beijing-based short seller and researcher J Capital Research that claimed the company has overstated its profits.
"At this stage, we are not particularly convinced or concerned by the allegations," said Morningstar analyst Gareth James who called the short seller's reports "unconvincing" in a research note on Monday.
He said the release of two separate research reports makes sense if the objective is to try and scare people and create fear amongst investors "but it does look a little bit like a hit job."
Morningstar remains bearish on the stock's valuation. It has a price target that values WiseTech at less than $2.6 billion compared to its current market capitalisation of $8.37 billion. But the research firm it has no problem with the quality of the business itself.
"We’re still comfortable that this is a decent business that should deliver relatively high earnings growth," he said.
WiseTech is aiming to become the operating system for the trillion dollar logistics industry with a cloud-based solution which ensures data gets entered once and shared everywhere on the system between different logistics providers.
TMS Capital portfolio manager Ben Clark also backed WiseTech and its management, lead by company founder Richard White, against the reports which allege the company has overstated revenue and earnings.
Mr Clark remains unconvinced by the J Capital arguments and its motivations.
If everything they say is real, you would have seen a lot more insider selling
TMS Capital portfolio manager Ben Clark
"You’ve just always got to keep in mind that the complete motivation of whoever disseminates the information is to get the share price down because that’s the only way they will make money," said Mr Clark.
“My view would be that Richard White has delivered on and more everything he’s said. He has barely taken any money out of his personal holding in WiseTech shares, and that to us is a real sign of confidence," he said.
TMS has owned WiseTech shares since 2016.
“If everything they say is real, you would have seen a lot more insider selling because there has been plenty of opportunities for the founders of this business to sell down their stakes. They have been incredibly reluctant to,” said Mr Clark.
Wisetech lodged a rebuttal on Friday to the first report saying it "rejects entirely the allegations of financial impropriety and irregularity contained in the document".
The stock has dropped more than 20 per cent since last Thursday when the first report from J Capital was released.
J Capital was co-founded by former Labor candidate for the federal seat of Wentworth, Tim Murray.
In China 'if you're not bending the rules you can't win,' says Tim Murray
WiseTech backers unconvinced by short seller 'hit job'
By Colin Kruger
October 23, 2019
One of WiseTech's earliest institutional shareholders has sprung to the defence of the logistics software company, while a market analyst dismissed the allegations levelled at the firm by J Capital Research as a 'hit job'.
WiseTech shares remain halted as the company prepares to respond to the second incendiary report from Beijing-based short seller and researcher J Capital Research that claimed the company has overstated its profits.
"At this stage, we are not particularly convinced or concerned by the allegations," said Morningstar analyst Gareth James who called the short seller's reports "unconvincing" in a research note on Monday.
He said the release of two separate research reports makes sense if the objective is to try and scare people and create fear amongst investors "but it does look a little bit like a hit job."
Morningstar remains bearish on the stock's valuation. It has a price target that values WiseTech at less than $2.6 billion compared to its current market capitalisation of $8.37 billion. But the research firm it has no problem with the quality of the business itself.
"We’re still comfortable that this is a decent business that should deliver relatively high earnings growth," he said.
WiseTech is aiming to become the operating system for the trillion dollar logistics industry with a cloud-based solution which ensures data gets entered once and shared everywhere on the system between different logistics providers.
TMS Capital portfolio manager Ben Clark also backed WiseTech and its management, lead by company founder Richard White, against the reports which allege the company has overstated revenue and earnings.
Mr Clark remains unconvinced by the J Capital arguments and its motivations.
If everything they say is real, you would have seen a lot more insider selling
TMS Capital portfolio manager Ben Clark
"You’ve just always got to keep in mind that the complete motivation of whoever disseminates the information is to get the share price down because that’s the only way they will make money," said Mr Clark.
“My view would be that Richard White has delivered on and more everything he’s said. He has barely taken any money out of his personal holding in WiseTech shares, and that to us is a real sign of confidence," he said.
TMS has owned WiseTech shares since 2016.
“If everything they say is real, you would have seen a lot more insider selling because there has been plenty of opportunities for the founders of this business to sell down their stakes. They have been incredibly reluctant to,” said Mr Clark.
Wisetech lodged a rebuttal on Friday to the first report saying it "rejects entirely the allegations of financial impropriety and irregularity contained in the document".
The stock has dropped more than 20 per cent since last Thursday when the first report from J Capital was released.
J Capital was co-founded by former Labor candidate for the federal seat of Wentworth, Tim Murray.
In China 'if you're not bending the rules you can't win,' says Tim Murray
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Knobby22
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I have not looked very closely, but it appears to me that if the price got to around $20 it would be a buy on fundamentals and in technical terms it would be oversold and bound to bounce back a bit.
bigdog
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Trading again
High today of $29.38 and low of $24.32
At 2:34 PM
ASX Announcement this morning
WTC responds to misinformation in market report
REFER UNLOADED FILE "WTC responds to misinformation in market report" FOR RESPONSE TO KEY CLAIMS
743
High today of $29.38 and low of $24.32
At 2:34 PM
ASX Announcement this morning
WTC responds to misinformation in market report
REFER UNLOADED FILE "WTC responds to misinformation in market report" FOR RESPONSE TO KEY CLAIMS
743
Last edited:
bigdog
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WTC was a major loser today after AGM announcement
In FY 2019 WiseTech Global delivered revenue of $348.3million and net profit after tax of $54.1million. This was a 57% and 33% increase, respectively, on FY 2018’s result.
The logistics solutions company reiterated its revenue and earnings guidance for FY 2020.
FY 2020 revenue is expected in the region of $440 million to $460 million, implying revenue growth of 26% to 32%. Whereas EBITDA is expected in the range of $145 million to $153 million. This represents EBITDA growth of 34% to 42%.
No doubt, the short seller J Capital has weighed on its shares today and a reminder that the short seller attack is far from over.
19/11/2019 9:33:19 AM WTC AGM addresses, on track to deliver FY20 guidance (uploaded)
009
In FY 2019 WiseTech Global delivered revenue of $348.3million and net profit after tax of $54.1million. This was a 57% and 33% increase, respectively, on FY 2018’s result.
The logistics solutions company reiterated its revenue and earnings guidance for FY 2020.
FY 2020 revenue is expected in the region of $440 million to $460 million, implying revenue growth of 26% to 32%. Whereas EBITDA is expected in the range of $145 million to $153 million. This represents EBITDA growth of 34% to 42%.
No doubt, the short seller J Capital has weighed on its shares today and a reminder that the short seller attack is far from over.
19/11/2019 9:33:19 AM WTC AGM addresses, on track to deliver FY20 guidance (uploaded)
009
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tinhat
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I bought some after J Capital fired their second salvo. I was hoping the share price might have bounced back a bit harder since then. Time will tell who is telling the truth, but Lincoln Indicators are still backing the company and I pay them the money to give me the info.
