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Is it time the shorts Wised up?

Market Updates

WiseTech was far and away Australia’s big short of 2019.

JCap – an activist research house – in late 2019 came out with a scratching short report on the logistics software company. That report covered everything from accounting issues, mediocre acquisition integration, and organic growth problems.

WiseTech’s share price crashed in the aftermath of the attack as investors were left scratching their heads over what would come next. Downgrades would follow in the early parts of 2020 as the coronavirus hit the company hard. The WiseTech narrative – built on heady growth and a leading product – seemed in tatters.

Over the last year though, the market’s faith in the company has returned. In that period the WiseTech share price is up 64%, finishing last week at $46 a share.

Why? 


For one. Being short is hard. Markets over time generally move to the left. That is, up. Moreover, while JCap certainly raised some interesting issues for investors to consider as part of its report – it was not a death blow in the Luckin Coffee or Wirecard sense. WiseTech is a good company, with good growth.

That final point was highlighted vigorously last week as part of the company’s FY21 results. Revenue was up 18% to $507 million, while earnings (EBITDA) trounced prior guidance, rising 63% to $206.7 million.

At one point the stock was up 53% in response to this earnings report, and while that frenzy cooled, WiseTech finished out last week up 28%. 

Jaaims AI trading system capitalised on these price swings, trading into (August 8) then out (August 24) of WiseTech for a quick-fire monster return of 34.59%. Click here to learn more about our AI trading solutions now.

Looking ahead, Australia’s corporate earnings season is all but done, with Qantas, Wesfarmers and Woolworths all reporting their latest earnings last week.

On Monday morning iron ore giant Fortescue Metals Group reported a spectacular set of full-year results. Here are the highlights:

  • Annual shipments of 182.2 million tonnes
  • Earnings (EBITDA) of US$16.4 billion and profits (NPAT) of US$10.3 billion
  • A final dividend of AU$2.11 per share, taking full year dividends to AU$3.58 per share.
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