- Well positioned to capitalise on the ‘data revolution’, the global information services company benefits from a competitive advantage and high margins
- Readers might consider following in the footsteps of famed ‘buy-and-hold’ investor Nick Train, who recently initiated a stake in the company
Increasing demand for data
Fund manager pick
As technology becomes increasingly interwoven into our lives, we are generating huge amounts of data, leaving a digital trail of our habits, preferences and identities. That’s a goldmine of information that businesses can use to target consumers, improve efficiency and assess risk. But unlocking this potential requires the ability to collate and analyse large volumes of raw data – often a time consuming and complicated task. That’s where information services specialist Experian (EXPN) comes in. While its roots lie in credit monitoring, the group has broadened its reach, now providing data and analytical tools to everyone from governments to healthcare providers. It has proved a profitable line of business, generating stable and high margins (see chart), which have translated to a rising return on capital employed (ROCE) – ROCE came in at 16.1 per cent in the year to 31 March 2020, a 0.2 percentage point increase from a year earlier.