May 11, 2023
Top 10 Stock Wolters Kluwer Buy Recommendation
How to read the ranks
For every stock, we judge its performance against its peers and rank it on a scale of 1 to 100. The higher the rank, the better the stock performs than its peers. And, we do this for six investment strategies:
Value - shows how good of a value the stock is. Green is "inexpensive"; red is "expensive".
Growth - shows a company's growth potential. Green is "high growth" expected; red is "tough times ahead".
Safety - relates to the amount of debt a company has. Green is low debt level; red is high debt level.
Combined Financial - this isn't an average of the first three ranks but rather a consolidated view across several financial indicators. Green = good; red = tread carefully.
(NEW) Sentiment - quantifies professional analyst ratings and holdings as well as market pulse. Green = positive sentiment; red = skepticism (Only available to Premium Subscribers).
(NEW) 360° View - the ultimate rating with all financial and non-financial indicators.
Snapshot: Wolters Kluwer – Top 10 Stock in AEX Index
Wolters Kluwer is listed as a top 10 stock on May 11, 2023 in the market index AEX because of its high performance in at least one of the Obermatt investment strategies. Two consolidated Obermatt Ranks are above-average. The company is growing above average, and professional investor sentiment is positive. Both are encouraging signals for a stock purchase decision, albeit at an above-average share price. Based on the Obermatt 360° Rank of 62 (high 62% performer), Obermatt assesses an overall buy recommendation for Wolters Kluwer on May 11, 2023.
Snapshot: Obermatt Ranks
| Country | Netherlands |
| Industry | Research & Consulting |
| Index | AEX, Employee Focus EU, Human Rights, SDG 16, SDG 3, SDG 5, SDG 9 |
| Size class | X-Large |
When Obermatt identifies the Top 10 stocks in a market, it’s based on a certain investment strategy. The best performing stocks usually aren’t the ones that everyone is talking about (those are often "over-priced" and have low Value ranks).
For each investment strategy, we provide you with more detailed analysis and our recommendation. You see the ranks of the top 10 stocks ranked by that particular investment strategy (360° View, Sentiment, Value, Growth, Safety and Combined Financial Performance).
360° View: Obermatt 360° Assessment Wolters Kluwer Buy
| 360 METRICS | May 11, 2023 | |||||||
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| VALUE | ||||||||
| VALUE | 1 |
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| GROWTH | ||||||||
| GROWTH | 90 |
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| SAFETY | ||||||||
| SAFETY | 49 |
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| SENTIMENT | ||||||||
| SENTIMENT | 69 |
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| 360° VIEW | ||||||||
| 360° VIEW | 62 |
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ANALYSIS: With an Obermatt 360° Rank of 62 (better than 62% compared with alternatives), overall professional sentiment and engagement for the stock Wolters Kluwer are above average. The 360° Rank is based on consolidating four consolidated indicators, with half of the metrics below and half above average for Wolters Kluwer. The consolidated Growth Rank has a good rank of 90, which means that the company experiences above-average growth momentum when looking at financial metrics such as revenue, profit, and invested capital growth as well as stock returns. This means that growth is higher than for 90% of competitors in the same industry. The consolidated Sentiment Rank also has a good rank of 69, which means that professional investors are more optimistic about the stock than for 69% of alternative investment opportunities. But the consolidated Value Rank has a less desirable rank of 1, which means that the share price of Wolters Kluwer is on the higher side compared with typical size in indicators such as revenues, profits, and invested capital. This means the stock price is higher than for 99% of alternative stocks in the same industry. Finally, the consolidated Safety Rank has a riskier rank of 49, which means that the company has a financing structure that is riskier than 51% comparable companies when looking at the amount of its debt, its refinancing requirements, and its ability to service debt. ...read more
RECOMMENDATION: With a 360° Rank of 62, Wolters Kluwer is better than 62% of all alternative stock investment opportunities based on the Obermatt Method. Only half of the consolidated Obermatt Ranks exhibit excellent performance, so one needs to take a close look. Growth is above-average (Growth Rank of 90), and professional market sentiment is positive (Sentiment Rank of 69), but value and safety are below average. The Safety Rank is the least important of the four consolidated ranks, because it only reflects financing practices. In the case of high growth, aggressive financing is a good thing. So the question is: How to assess below-average value against above-average growth and sentiment? Growth may be the strongest driver of the investment rationale in this case, which is reflected in institutional investors' opinions. It is typical for growth companies to have low value, as is the case here. Investors are willing to pay more for companies that outperform their competitors. So the question is, how much do you sacrifice value for growth? You can use the following rule of thumb: If you take one minus the growth rank, that is the minimum level that the value rank should have. For example, if the growth rank is at 75, and the value rank is at 5, you should tread carefully. If the value rank is at 40, it still might be a good value (even though it is lower than 50). Sometimes market sentiment just extrapolates the past, but sometimes they are right. You pay more than the market average for this stock, but it may be worth it. ...read more
Sentiment Strategy: Professional Market Sentiment for Wolters Kluwer positive
ANALYSIS: With an Obermatt Sentiment Rank of 69 (better than 69% compared with alternatives), overall professional sentiment and engagement for the stock Wolters Kluwer is above average. The Sentiment Rank is based on consolidating four sentiment indicators, with all but one indicator above average for Wolters Kluwer. Analyst Opinions are at a rank of 18 (worse than 82% of alternative investments), which means that currently, stock research analysts tend to warn against investing in the stock of the company. But they are changing their opinions! Analyst Opinions Change has a rank of 50, which indicates a shift in stock research experts opinions for the better. In other words, they are getting more optimistic about stock investments in Wolters Kluwer. Even better, the Professional Investors rank is 71, meaning that professional investors hold more stock in this company than in 71% of alternative investment opportunities. Pros tend to favor investing in this company. Furthermore, Market Pulse has a rank of 97, which means that the current professional news and professional social networks are upbeat when discussing this company (more positive news than for 97% of competitors). ...read more
RECOMMENDATION: With an Obermatt Sentiment Rank of 69 (more positive than 69% compared with investment alternatives), Wolters Kluwer has a reputation among professional investors that is above-average compared with that of its competitors. While analysts are still critical of the company, some are changing their minds. In addition, the professional news channels are optimistic, and many institutional investors have already bought stock in the company. These are encouraging signals, despite the still lower level of analyst recommendations. They may be due to a problematic past, and about to change. The positive sentiment signals are stronger than the negative. ...read more
Value Strategy: Wolters Kluwer Stock Price Value low
ANALYSIS: With an Obermatt Value Rank of 1 (worse than 99% compared with alternatives), Wolters Kluwer shares are significantly more expensive than comparable stocks. The Value Rank is based on consolidating four value indicators, with all four indicators below average for Wolters Kluwer. Price-to-Sales has a value of 7 which means that the stock price compared with what market professionals expect for future profits is higher than 93% of comparable companies, indicating a low value concerning Wolters Kluwer's sales levels. Price-to-Book Capital (also referred to as market-to-book ratio) also has a low Obermatt Price-to-Book Rank of 9, which means that both reliable company size indicators, sales, and invested capital cannot explain the high stock price of Wolters Kluwer. In addition, the two profit-related value indicators, Price-to-Profit (also referred to as price-earnings, P/E) with a low rank of 13 and Dividend Yield, which is lower than 83% of comparable companies, also make the stock more expensive compared with investment alternatives. ...read more
RECOMMENDATION: The overall picture with a consolidated Value Rank of 1, is a SELL recommendation based on Wolters Kluwer's stock price compared with the company's operational size and dividend yields. How can market participants pay such a high price for Wolters Kluwer? One reason may be that the company is simply too popular. If enough people want a particular stock, its price can exceed reasonable levels. This is often the case for new and exciting products where everybody wants a piece of the action. Should you pay a lot for a hot stock such as Wolters Kluwer? It's risky, and even if it continues to grow because of popular demand, it will most likely return to what it's worth. And that return can be sudden and quick, making it impossible for retail investors to exit on time. Sometimes, high prices are deserved. This is the case when it is reasonable for the company to dominate a market with high profit margins. It has happened in the past for many technology companies and indeed for successful pharmaceutical discoveries. Sometimes they last, sometimes, they get eaten alive. Wolters Kluwer may be such a type of stock. That would mean, retail investors should be careful, only considering investing a small part of their wealth in this exciting category and always being ready to lose more than half, if not all of the investment. ...read more
Growth Strategy: Wolters Kluwer Growth Momentum high
ANALYSIS: With an Obermatt Growth Rank of 90 (better than 90% compared with alternatives) for 2023, Wolters Kluwer shows one of the highest growth dynamics in its industry. Investors also speak of high momentum. The Growth Rank is based on consolidating four value indicators, with all four indicators above average for Wolters Kluwer. Sales Growth has a value of 68, which means that, currently, professionals expect the company to grow more than 68% of its competitors. The same is valid for Profit Growth with a value of 50 and for Capital Growth with 61. In addition, Stock Returns had an above-average rank value of 85, which means they have been higher than 85% of comparable investments. ...read more
RECOMMENDATION: The overall picture with a consolidated Growth Rank of 90, is a BUY recommendation for growth and momentum investors. Since all Growth Ranks are positive, Wolters Kluwer exhibits above-average growth momentum. This could be due to a uniquely strong market position, proprietary technology, or an extensive corporate acquisition strategy. Growth investors will find this an attractive investment opportunity, unless they expect that the current phase is transitory and will deteriorate in the future, or if the current performance is only a temporary recovery from a very low point in the company's history, such as a turn-around. In the case of a turn-around situation, the current performance is a positive indicator that the company is on the right track. ...read more
Safety Strategy: Wolters Kluwer Debt Financing Safety below-average
| SAFETY METRICS | May 11, 2023 | |||||||
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| LEVERAGE | ||||||||
| LEVERAGE | 23 |
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| REFINANCING | ||||||||
| REFINANCING | 32 |
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| LIQUIDITY | ||||||||
| LIQUIDITY | 77 |
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| CONSOLIDATED RANK: SAFETY | ||||||||
| CONSOLIDATED RANK: SAFETY | 49 |
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ANALYSIS: With an Obermatt Safety Rank of 49 (better than 49% compared with alternatives), the company Wolters Kluwer has financing practices on the riskier side, which means that their overall debt burden is above the industry average. This doesn't mean that the business of Wolters Kluwer is also risky, it only means that the company is on the riskier side in respect to bankruptcy in case things turn sour, assuming that public reporting is correct. The Safety Rank is based on consolidating three financing indicators, with just one indicator above average for Wolters Kluwer. Liquidity is at 77, meaning the company generates more profit to service its debt than 77% of its competitors. This indicates that the company is safer when it comes to debt service. But Refinancing is riskier at a rank of 32, which means that the portion of the debt that is about to be refinanced is above average. It has more debt in the refinancing stage than 68% of its competitors. Leverage is also high at a rank of 23, which means that the company has an above-average debt-to-equity ratio. It has more debt than 77% of its competitors. ...read more
RECOMMENDATION: With an Obermatt Safety Rank of 49 (worse than 51% compared with alternatives), Wolters Kluwer has a financing structure that is riskier than that of its competitors. High Leverage (a low Obermatt Leverage Rank) is good in good times, because it usuallyl indicates that shareholders get higher returns. The good Liquidity performance of the company is an indicator that this is the case. However, if you expect an economic downturn, you may stay clear of this stock because they have an above-average debt level that needs refinancing soon. ...read more
Combined financial peformance: Wolters Kluwer Below-Average Financial Performance
| COMBINED PERFORMANCE | May 11, 2023 | |||||||
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| VALUE | ||||||||
| VALUE | 1 |
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| GROWTH | ||||||||
| GROWTH | 90 |
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| SAFETY | ||||||||
| SAFETY | 77 |
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| COMBINED | ||||||||
| COMBINED | 45 |
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ANALYSIS: With an Obermatt Combined Rank of 45 (worse than 55% compared with investment alternatives), Wolters Kluwer (Research & Consulting, Netherlands) shares have somewhat below-average financial characteristics compared with similar stocks. Shares of Wolters Kluwer are low in value (priced high) with a consolidated Obermatt Value Rank of 1 (worse than 99% of alternatives), and are riskily financed (Safety Rank of 49, which means above-average debt burdens) but show above-average growth (Growth Rank of 90). ...read more
RECOMMENDATION: An Obermatt Combined Rank of 45, is a hold recommendation based on Wolters Kluwer's financial characteristics. As the company Wolters Kluwer shows low value with an Obermatt Value Rank of 1 (99% of comparable investments are less expensive), investors should look at the other ranks. In this case, growth is expected to be above-average, better than 90% of comparable companies (Obermatt Growth Rank is 90). This is a typical case. Companies with above average growth tend to cost more than the sluggish variety. If this is a high-growth company, the low Obermatt Safety Rank of 49 is a good sign. The more debt a well-performing company has, the higher the returns to shareholders. However, if growth turns negative or interest rates increase, high debt may become a burden. If you believe the future is bright for Wolters Kluwer, even a low-value company (in terms of its key financial indicators) can be a good investment. ...read more
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