Trading Idea: Wolters Kluwer (WKL-NL)
Our system also triggered an Enter Long Tactical signal on November 12, 2021 that imply a likely bullish acceleration. Wolters Kluwer has a very strong track record, with a Behavioral score of 10/10, therefore the bullish signal is to be considered as mainly Strategic.
Wolters Kluwer is a € 25.9 Bn market cap leading global provider of information, software, and services for professionals. Company's revenue are derived from its tax and accounting, health, governance, risk and compliance, and legal and regulatory business segments. Tax and accounting business is the largest earnings contributor in the most recent fiscal year, representing 37% of Wolters Kluwer's operating segment.
Wolters Kluwer derive approximately 81% of its revenue from recurring sources, most of which are generated from digital and services subscriptions. Moving forward, Wolters Kluwer is targeting to grow the proportion of higher-margin digital, expert solutions and cloud software businesses as a percentage of its total sales over time. This will help the company to increase its revenue contribution from recurring revenue businesses and improve its profitability as a result of increased sales derived from higher-margin businesses.
Wolters Kluwer earned 92% of its 9M21 revenue from digital sales, which grew by +6% in organic terms last year. The company remains focused on advancing its domain expertise by continued enhancement of its digital information products, particularly embedding AI and analytics.
Wolters Kluwer is a typical quality growth stock with a defensive profile and low beta.
Short term catalyst : Acquisitions, margin expansion.