Shares of WiseTech Global Ltd (ASX: WTC) have rocketed higher by around 6% today after a research note by Bell Potter revealed the broker had upgraded the company's shares to a buy rating with a $5.90 price target.
The company which provides software solutions to the logistics industry has only been listed since April, but has already steadily risen in value by over 40%.
I'm a big fan of WiseTech Global and believe its software CargoWise One is an invaluable asset for logistics companies in an increasingly complex industry which is growing at a rapid clip thanks to the rise in online shopping.
The CargoWise One software is designed to remove some of this complexity and make the shipping process more efficient by providing a single platform for all parts of the logistics process.
According to IbisWorld, online shopping grew at an average of 14.6% per annum in the last five years. I believe this level of growth could continue for some time to come, making it ever more important that logistics companies become more efficient.
The good news for shareholders is that its software appears to be hitting the mark with users. The company has reported a churn rate of just 0.4%, which is very impressive in my opinion. I feel not only does this mean lots of happy customers spreading the word, it also gives this growing company a firm foundation on which to grow from.
Right now I would say WiseTech Global is up there with fellow software company Aconex Ltd (ASX: ACX) as one of the best tech investments you could make. Whilst it might trade at a premium to the rest of the S&P/ASX 200 (Index: ^AXJO) (ASX: XJO), it certainly has strong growth prospects backing this up.
Even after today's gains the price target that Bell Potter has slapped on its shares implies upside in the region of over 8%. But should you invest? If you're happy to buy and hold its shares, then I would say this would be a great addition to your portfolio today.
