WTC and Woolworths Group Ltd: 2 ASX shares to dig into

The WiseTech Global Ltd (ASX:WTC) share price has jumped 57.9% since the start of 2024. It's probably worth asking, 'is the WTC share price cheap?'

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The WiseTech Global Ltd (ASX:WTC) share price has jumped 57.9% since the start of 2024. The Woolworths Group Ltd (ASX:WOW) share price is tracking 2.6% off its 52-week lows.

WTC share price in focus

Founded in 1994 by Richard White and Maree Isaacs, Wisetech Global is a developer of cloud-based software used for international and domestic logistics industries.

Wisetech’s vast suite of software products is used across various logistics functions including fowarding & customs, landside transport, rates & contracts, warehousing, and transport management systems.

Their cornerstone software is called Cargowise. It’s become an industry-leading solution now used by all 25 of the largest global freight forwarders and 46 of the top 50 third-party logistics providers.

WOW shares

Founded in 1924, Woolworths is a leading retail operator in Australia and New Zealand, with over 3,000 stores and more than 100,000 employees. As one of Australia’s largest companies by revenue and market share, Woolworths plays a significant role in the region’s retail sector.

The company’s core operations include supermarkets (operating under the Woolworths brand in Australia and Countdown in New Zealand), discount department stores under the Big W brand, and business-to-business (B2B) services through brands like PFD. However, Woolworths’ dominant 35%+ market share in the Australian grocery sector remains its key strength.

WTC & WOW share price valuation

As a growth company, one way to put a rough guesstimate on the WTC share price could be to compare its price-to-sales multiple over time. This can tell us how the company has historically been valued relative to its total revenue.

Currently, WiseTech Global Ltd shares have a price-sales ratio of 38.60x, compared to its 5-year average of 31.86x, meaning its shares are trading above their historical average. This could mean that the share price has increased, or that sales have declined, or both. In the case of WTC, revenue has been growing over the last 3 years. Of course, context is important – and this is just one valuation technique. Investment decisions can’t just be based on one metric, but this can be a rough starting point.

Since it is a more of a ‘blue chip’ company, we could look at the dividend yield of WOW to determine its value. If we compare it to the historical dividend yield, we can get a sense of the stability of the company and its ability to pay out income. WOW is offering a trailing dividend yield of around 4.81%, which compares to its 5-year average of 2.92%. This is just one of many ways you could put a value on WOW shares. The Rask websites offer free online investing courses, created by analysts explaining valuation methods like Discounted Cash Flow (DCF) and Dividend Discount Models (DDM). They even include free valuation spreadsheets which can help you learn how to value a company like WTC or WOW.

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