MM’s view on WTC and MP1 please

Hi David,

Two tech stocks very much in the pointy end of town over the last few months:

WiseTech (WTC) – The cloud based logistics software business disappointed with their forward guidance this week which leads to our caution with the stock trading on an astronomical 87x valuation for 2024 i.e. it needs to keep growing strongly. In today’s environment stocks that miss have tended to stay in the naughty corner for weeks/ months hence we are happy to be on the side-lines at this stage. If we were looking for areas to buy WTC it would probably be a case of slowly accumulating below $70, adding on every $5 level i.e. $65, $60 etc.

Megaport (MP1) – We don’t actually hold MP1 in any of our portfolios hence we will answer this question from a theoretical standpoint i.e. we cannot add to no position. The Tech Sector is approaching our medium term target area hence although we are short term bullish the sector after more than tripling in the last 4 months, we are not considering buying MP1.

Within these questions/answers, there is an important point to make for subscribers. Trends in earnings and forecasts are incredibly important, perhaps more so now because there is a lot more computer driven quantitative assessments happening in the background, scanning the market looking for incremental changes to momentum, not just price momentum but changes within the fundamental picture of a company, even if they are small. This continued growth in “quant” is perhaps a reason for more exaggerated and longer lasting moves on either side of the ledger following results.

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Megaport Ltd (MP1)

LAST UPDATED 25/08/2023 12:06

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Megaport Ltd (MP1)

LAST UPDATED 25/08/2023 12:06