The WTC results certainly put a spring in my step this morning. I thought the presentation deck was incredibly detailed, much higher quality and more insightful than pretty much any of my other holdings.

I used to be concerned that WTC was building up a technical debt with all of its acquisitions, but they not only declare the cost of maintaining these legacy technology acquisitions, these costs are declining and they are now launching Cargowise Neo, a replatformed version of the core Cargowise One which retains the same Windows UI as well as introducing a new web UI.

The fact that they can continue to increase their investment in R&D, increase their market penetration, increase their profits and dividends, and give guidance for 25% to 30% revenue growth and 50% EBITDA growth in FY25 tells me that this is a special company.

@lankypom - yes. I expected a positive market reaction, but not quite what we are seeing!

Impressive WTC result and, importantly, the outlook. I'll forego my usual detailed write-up, save to say the following, with one key slide:

• H2 FY24 returned EBITDA margin to 50% one year early (following depression due to acquisition of Envase and Blume). $WTC really has institutionalised acquiring bolt-on capability and then integrating it rapidly (1-2 years).
• Strong set of product rollouts happening in FY25, expected to push up organic Cargowise revenue growth at high margin. Recent acquisitions have really built-out the landside logistics capabilities (Envase, Blume, Matchbox - all being cannibalised as the functionality is folded into and enhanced in CW)
• Stepping up investment in R&D again - great for future innovation - $WTC is an innovation machine. Increased % capitalisation indicates that a declining proportion of R&D spend is going into maintenance ... so they say ... but I'll continue to buy this based on track record. (Increased capitalisation aids EBITDA growth.)
• RW did a deepdive on how the CW platform adds value to customers and its differentiation to competitors. Its beyond cost and IT optimisation, and increasingly helping customers run their businesses more effectively and efficiently ... that's where the future value from existing customers lies. Optional modules that customers can opt into,... at a price. ;-)

In summary, another year on the journey to creating the operating system for global logistics.

As if yesterday's 18% surge wasn't impressive enough -- especially for a ~$40b company -- but it's up ANOTHER 8.5% today.

Now the PE is something like 135x! Heck, the company is on 30x forward sales (which anticipates 30% growth)

Ok, so earnings underrepresents FCF, the balance sheet is strong and there's a long run way ahead...but still. wow.

Separately, have been called away with other tasks today but just logging on now I've been blown away by the volume and quality of analysis. Go team!

LOL im trying to find a comp at 40x sales, but nothing close so far, on the NASDAQ of course, the domestic market so staid. i thought maybe TEAM but nah only 10X

As expected, the $WTC results did indeed send it on another leg up.

I undertook a comprehensive update of my valuation after the results, getting $103 ($92 - $123), as posted here earlier.

In the interests of full disclosure, I have now fully sold out my RL position: 50% at $121.79 on 22-Aug and 50% at $132.37 on 13-Sept.

The current SP is well ahead of my highest scenario, which is fairly aggressive, both in the medium-term rate of EPS growth and the longevity of that growth.

I know the prevailing wisdom is to let your winners run. However, $WTC has flown up well beyond my high case valuations on 5 times in the last 8 years, and I have successfully traded out, always to buy back within the year. I accept that it might do a $PME on me (who'd have thought $PME would be up 60% so far this year!) but I'll take that risk.

If history repeats, I'll get my opportunity to buy back in to $WTC as a decent discount. I'm probably a "buy" at $110, .... which will track forward over time.

$WTC is the gift that keeps on giving and is now, far and away, the largest wealth winner I've had not only on the ASX but anywhere.

Disc: Not Held

Mike - interested to understand your approach when buying back in at a higher price. Do you have a base level allocation (I.e $10k) that you put back in or do you look to align it to a % of your overall portfolio or just a ‘whatever cash is on hand’ at the time your entry point is hit?

@thetjs The starting point is my valuation, for which I have an expected value, and a range (min-max), where the range covers what I think is about "80%" of where the "true" value lies. I know it's all subjective, but I try to quantify the risk and reward in this way. Although my valuations are flawed and subjective, doing this means that I take my decisions based on analysis and not emotion.

For a business for which I have a very high conviction like $WTC, if the SP falls back towards the middle of my range, I'll build up to a 5% position. And if the SP gets down towards the bottom of my range, then I'll increase up to a maximum of a 10% position. This has happened twice in the last 15 months, although one time (late Aug-23) I didn't get more than a 6.7% position before the SP turned sharply back up again.

This is also why I don't try to pick "tops" and "bottoms" but phase my buys and sells in over time.

Generally, c. 10% on a cost-basis is the largest portion of my portfolio I will put into any one business. Any business can fail, and this is the level of exposure I am comfortable with. I emphasis on a "cost-basis" because I don't sell down to "take profits" anymore. I used to until about 3 years ago. Now, I only sell on valuation.

The logic here is that - in the absence of new, company-specific information - the lower the SP falls, the increased confidence I have that my investment will yield a higher return over time.

In theory, it doesn't matter how much cash I have, as I will always sell lower conviction holdings for the opportunity to buy a business for which I have a higher conviction at a fair price. I say "always", but if everything in my portfolio was beaten up at the same time and far below my valuations, clearly in practice I wouldn't sell. This is one reason why I always try to hold 5-10% cash in RL, so that I can always act on these opportunities. This is important, because just when my most coveted business offers a good deal, macro-factors might equally mean that most or all of the rest of my portfolio is beaten up!

Interestingly, there are relatively few companies that I feel confident enough to do this with. Most of the time, my valuation ranges are too wide to be actionable in this way. (In the last 8 years, I have only done this with $WTC, $ALU, $XRO, $TNE, $PNV and $BRG - all companies I have followed a long time and researched in depth.)

I hope this is clear.

It is mate.

Appreciate the response.

Working out reinvestment and portfolio balance is something I’m still getting to a comfortable position on so always keen to hear how others do it!