FPA Capital Fund (Trades, Portfolio) increased its holding of Houghton Mifflin Harcourt Co. (HMHC, Financial) during the first quarter, buying 733,470 shares for an aveage price of $10.46 per share. The trade expanded the portfilio position by 1.5%.
Headquartered in Boston, Houghton Mifflin is a global learning company that specializes in providing textbooks, media-based content, services and technology to more than 50 million students across 150 countries. The company is focused on providing learning opportunities for students in kindergarten through 12th grade. It has a portfolio of educational, general interest, children’s and reference books that were developed by award-winning authors, including 10 Nobel Prize winners, 48 Pulitzer Prize winners and 15 National Book Award winners.
Houghton Mifflin Harcourt has a market cap of $1.31 billion, an enterprise value of $1.72 billion, a price-book (P/B) ratio of 1.52, a price-sales (P/S) ratio of 0.91 and a quick ratio of 1.08.
According to GuruFocus, the company has a 4 of 10 financial strength rating with a cash-debt ratio of 0.40 and an equity-asset ratio of 0.32. Its Altman Z-Score of -1.13 indicates the company is under financial stress and could potentially file for bankruptcy within the next two years.
The company has a 3 of 10 profitability and growth rating. It has an operating margin of -22.64%, a net margin of -20.73%, a return on assets (ROA) of -9.66%, a -27.85% return on equity (ROE) and a return on capital (ROC) of -148.72%.
Over the previous year, Houghton Mifflin Harcourt’s stock price has declined an estimated 48%.
Since FPA Capital's recent transaction, the stock price has gained an estimated 2%.
Disclosure: Author does not own any shares of this company.
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