3 ASX tech shares I'd buy right now

Here's why WiseTech Global Ltd (ASX: WTC) and 2 other top ASX tech shares are on my buy list today.

| More on:
a woman

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

The Australian tech sector is tiny compared to that of the United States, but Australia is slowly building up a number of great local tech companies that have been growing strongly, both locally and in a number of overseas markets.

Here are 3 of my top picks: Xero Limited (ASX: XRO), Webjet Limited (ASX: WEB) and WiseTech Global Ltd (ASX: WTC). All 3 have very different but proven business models and have grown strongly over the past 5 years. I believe they also all have strong growth prospects over the next decade, driven mainly by their growing overseas markets.

Xero

Xero is an online accounting software provider for small businesses that has seen incredible growth over the past 10 years and I feel that there are no signs of that growth slowing down anytime soon. One of Xero's key differentiators over its competitors is that it is affordable and user-friendly, making it ideal for small businesses, unlike some of its competitors' products, which can be expensive and more complex to use.

In its half year earnings to 30 September 2019, operating revenue was up 32% to NZ$338.7 million, while earnings before interest, tax, depreciation and amortisation almost doubled. Xero has a very high gross profit margin of 85%. Despite its rapid recent growth, I believe that Xero still has a long runway for growth ahead of it over the next decade.

Webjet

Concerns about the spread of the coronavirus saw ASX travel shares drop over the past 2 weeks, and Webjet was one of the worst hit, although it has regained a bit of ground over the past few days. I believe that Webjet's share price have been somewhat oversold, which means now could be a good time to take position in a company that I feel has strong growth prospects over the next few years, due to the continued transition of the travel industry to online bookings.

In particular, the travel group's WebBeds business-to-business segment has been growing at a rapid rate. Webjet appears to be well positioned to continue to grow this business segment quickly over the next few years.

WiseTech Global

WiseTech Global is a leading global developer and provider of software solutions for the logistics industry. Its customers include over 12,000 of the world's logistics companies across more than 150 countries. It has carved out a very successful and strong niche in the global market.

For the 12 months ending June 2019, WiseTech Global recorded revenue of $348 million and net profit after tax of $54 million, a 57% and 33% annual increase, respectively.

WiseTech Global continues to grow at a rapid pace, in both size and scale via organic growth and targeted acquisitions. It has made 17 acquisitions across Europe, Asia, Australasia and the Americas since 2018.

Phil Harpur owns shares of Webjet Ltd., WiseTech Global, and Xero. The Motley Fool Australia's parent company Motley Fool Holdings Inc. owns shares of WiseTech Global and Xero. The Motley Fool Australia has recommended Webjet Ltd. 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.

More on Share Market News

A man sits on a bench atop a mountain with a laptop, making investments with a green ESG mind.
Share Gainers

Here are the top 10 ASX 200 shares today

Investors endured a day to forget this hump day.

Read more »

A woman presenting company news to investors looks back at the camera and smiles.
Broker Notes

Up 110% in 12 months: Why this ASX 200 stock can keep flying

Let's see what Bell Potter is saying about this high-flyer.

Read more »

Contented looking man leans back in his chair at his desk and smiles.
Broker Notes

Top brokers name 3 ASX shares to buy today

Here's what brokers are recommending as buys this week.

Read more »

A young female investor with brown curly hair and wearing a yellow top and glasses sits at her desk using her calculator to work out how much her ASX dividend shares will pay this year
Opinions

Why I'm still investing in ASX shares during tariff uncertainty

There are a few reasons why I plan to continue investing even during uncertainty.

Read more »

Frustrated stock trader screaming while looking at mobile phone, symbolising a falling share price.
Share Fallers

Why Imricor, Imugene, Newmont, and Pepper Money shares are falling today

These shares are having a tough time on hump day. But why?

Read more »

A young woman holding her phone smiles broadly and looks excited, after receiving good news.
Share Gainers

Why Droneshield, Meteoric Resources, Mount Gibson, and Tyro shares are charging higher

These shares are having a good time on hump day. But why?

Read more »

A young woman sits with her hand to her chin staring off to the side thinking about her investments.
Share Market News

Does this broker prefer Treasury Wine or A2 Milk shares?

These consumer staples companies are comparable in size but not in upside according to this broker. 

Read more »

Broker looking at the share price.
Share Market News

5 things to watch on the ASX 200 on Wednesday

The Australian share market looks set to give back yesterday's gains.

Read more »