Today I initiated a position in Wolters Kluwer. Not because it’s exciting. Not because it’s trending. But because the underlying business model is exceptionally strong.
$WKL (-2.65%) operates mission-critical software in Legal, Tax, Accounting and Healthcare. These are workflows professionals depend on daily. Switching costs are high, integration is deep, and pricing power is real. Roughly 80% of revenues are recurring and the company consistently generates strong free cash flow with an asset-light model and high ROIC.
Yes, growth is moderating and the multiple isn’t “cheap” in absolute terms. But quality rarely is. What I see is a durable compounder with disciplined capital allocation, steady buybacks, and structural demand driven by regulation and digitization.
Short term volatility wouldn’t surprise me. But over a 5–10 year horizon, I believe owning high-quality, cash-generative businesses beats chasing narratives.
Let’s see how this one compounds.
