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GuruFocus Financial Strength Rank measures how strong a company’s financial situation is. It is based on these factors

1. The debt burden that the company has as measured by its Interest coverage (current year).
2. Debt to revenue ratio. The lower, the better
3. Altman Z-score.

A company ranks high with financial strength is likely to withstand any business slowdowns and recessions.

Financial Strength : 4/10

vs
industry
vs
history
Cash to Debt 0.66
HMHC's Cash to Debt is ranked lower than
68% of the 148 Companies
in the Global Education & Training Services industry.

( Industry Median: 2.48 vs. HMHC: 0.66 )
Ranked among companies with meaningful Cash to Debt only.
HMHC' s Cash to Debt Range Over the Past 10 Years
Min: 0.4  Med: 1.92 Max: N/A
Current: 0.66
Equity to Asset 0.43
HMHC's Equity to Asset is ranked lower than
69% of the 143 Companies
in the Global Education & Training Services industry.

( Industry Median: 0.60 vs. HMHC: 0.43 )
Ranked among companies with meaningful Equity to Asset only.
HMHC' s Equity to Asset Range Over the Past 10 Years
Min: 0.43  Med: 0.60 Max: 0.64
Current: 0.43
0.43
0.64
F-Score: 4
Z-Score: 0.03
M-Score: -3.38
GuruFocus Profitability Rank ranks how profitable a company is and how likely the company’s business will stay that way. It is based on these factors:

1. Operating Margin
2. Trend of the Operating Margin (5-year average). The company with an uptrend profit margin has a higher rank.
••3. Consistency of the profitability
4. Piotroski F-Score
5. Predictability Rank•

The maximum rank is 10. A rank of 7 or higher means a higher profitability and may stay that way. A rank of 3 or lower indicates that the company has had trouble to make a profit.

Profitability Rank is not directly related to the Financial Strength Rank. But if a company is consistently profitable, its financial strength will be stronger.

Profitability & Growth : 3/10

vs
industry
vs
history
Operating margin (%) -8.61
HMHC's Operating margin (%) is ranked lower than
80% of the 147 Companies
in the Global Education & Training Services industry.

( Industry Median: 6.92 vs. HMHC: -8.61 )
Ranked among companies with meaningful Operating margin (%) only.
HMHC' s Operating margin (%) Range Over the Past 10 Years
Min: -157.27  Med: -7.84 Max: -6.22
Current: -8.61
-157.27
-6.22
Net-margin (%) -8.70
HMHC's Net-margin (%) is ranked lower than
80% of the 147 Companies
in the Global Education & Training Services industry.

( Industry Median: 4.59 vs. HMHC: -8.70 )
Ranked among companies with meaningful Net-margin (%) only.
HMHC' s Net-margin (%) Range Over the Past 10 Years
Min: -168.48  Med: -8.10 Max: -6.78
Current: -8.7
-168.48
-6.78
ROE (%) -7.38
HMHC's ROE (%) is ranked lower than
76% of the 140 Companies
in the Global Education & Training Services industry.

( Industry Median: 5.52 vs. HMHC: -7.38 )
Ranked among companies with meaningful ROE (%) only.
HMHC' s ROE (%) Range Over the Past 10 Years
Min: -13.73  Med: -6.18 Max: -5.86
Current: -7.38
-13.73
-5.86
ROA (%) -3.82
HMHC's ROA (%) is ranked lower than
75% of the 146 Companies
in the Global Education & Training Services industry.

( Industry Median: 2.71 vs. HMHC: -3.82 )
Ranked among companies with meaningful ROA (%) only.
HMHC' s ROA (%) Range Over the Past 10 Years
Min: -3.77  Med: -3.74 Max: -2.77
Current: -3.82
-3.77
-2.77
ROC (Joel Greenblatt) (%) -38.68
HMHC's ROC (Joel Greenblatt) (%) is ranked lower than
82% of the 147 Companies
in the Global Education & Training Services industry.

( Industry Median: 14.87 vs. HMHC: -38.68 )
Ranked among companies with meaningful ROC (Joel Greenblatt) (%) only.
HMHC' s ROC (Joel Greenblatt) (%) Range Over the Past 10 Years
Min: -30.5  Med: -28.58 Max: 21.85
Current: -38.68
-30.5
21.85
» HMHC's 10-Y Financials

Financials


Revenue & Net Income
Cash & Debt
Oprt. Cash Flow & Free Cash Flow

» Details

Guru Trades

Q1 2015

HMHC Guru Trades in Q1 2015

Scott Black 81,273 sh (New)
John Keeley 1,020,450 sh (New)
Jim Simons 352,400 sh (+796.69%)
Chuck Royce 360,759 sh (+163.33%)
John Paulson 30,912,558 sh (unchged)
Pioneer Investments 325,532 sh (-0.03%)
Paul Tudor Jones 26,253 sh (-19.89%)
» More
Q2 2015

HMHC Guru Trades in Q2 2015

Joel Greenblatt 42,386 sh (New)
Louis Moore Bacon 200,920 sh (New)
Julian Robertson 68,800 sh (New)
Ron Baron 1,021,511 sh (New)
Manning & Napier Advisors, Inc 3,094,493 sh (New)
Pioneer Investments 726,694 sh (+123.23%)
John Keeley 1,569,690 sh (+53.82%)
Scott Black 81,273 sh (unchged)
Jim Simons Sold Out
Paul Tudor Jones Sold Out
Chuck Royce 347,759 sh (-3.60%)
John Paulson 12,229,224 sh (-60.44%)
» More
Q3 2015

HMHC Guru Trades in Q3 2015

Paul Tudor Jones 44,003 sh (New)
Jim Simons 486,242 sh (New)
First Pacific Advisors 585,960 sh (New)
Ron Baron 1,772,748 sh (+73.54%)
Julian Robertson 77,400 sh (+12.50%)
Manning & Napier Advisors, Inc 3,296,383 sh (+6.52%)
John Paulson Sold Out
Pioneer Investments Sold Out
Joel Greenblatt Sold Out
John Keeley 1,529,280 sh (-2.57%)
Scott Black 76,783 sh (-5.52%)
Chuck Royce 325,518 sh (-6.40%)
Louis Moore Bacon 89,206 sh (-55.60%)
» More
Q4 2015

HMHC Guru Trades in Q4 2015

FPA Capital Fund 208,730 sh (New)
Chuck Royce 218,818 sh (-32.78%)
Jim Simons 215,800 sh (-55.62%)
» More
» Details

Insider Trades

Latest Guru Trades with HMHC

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Guru Investment Theses on Houghton Mifflin Harcourt Co

Baron Funds Comments on Houghton Mifflin Harcourt Co. - Jan 14, 2016

Another recent purchase is Houghton Mifflin Harcourt Co. (NASDAQ:HMHC), a leader in K-12 educational content and services. It has globally recognized brands; rich, iconic and proven content; a reputation as an educational innovator; and a deep competitive moat around its franchise. After going through a pre-packaged bankruptcy in 2012, the company has brought in new management to lead the transition to a business model that incorporates digital instructive content. We think Houghton will benefit from a large and growing market, as educational budgets are augmented and the business relationship shifts from a lumpy textbook adoption cycle to a more sustainable digital subscription-based model.



From the Baron Funds Small Cap Fund winter newsletter 2016.



Check out Ron Baron latest stock trades

Baron Funds Comments on Houghton Mifflin Harcourt Company - Aug 19, 2015

Houghton Mifflin Harcourt Company (NASDAQ:HMHC) is a global leader in Pre-K to 12 educational content and services. The company has dominant domestic market shares in reading, math and sciences, over 40% in the three largest areas of curriculum. They have globally recognized brands; rich, iconic and proven content; an established reputation as an educational innovator; and a deep competitive moat around their franchise.





The company went through a pre-packaged bankruptcy in 2012 to mend an over leveraged balance sheet. New management was brought in from Microsoft and the broader technology industry to lead the transition of the business to a new model, incorporating digital content as part of learning transformation. Products have been re-configured to incorporate the appropriate amount of digital instructive content to enhance the learning experience and learning outcomes. We think we are in very capable hands - the new team has the experience, savvy, and professionalism to take the business to the next level.





The market for educational content is large and has improving fundamentals. The outlook for state and local educational budgets is better after several years of deferred purchases. We believe there will be the funds plus the desire/focus to spend on education. We believe incorporating digital content that necessarily will be updated and served by the content provider will actually make the bond between districts and publishers tighter. The business will evolve into more of a sustainable subscription business relationship as opposed to a lumpy textbook adoption cycle, which we believe will be favored by the markets. . .rightfully so.





In addition, Houghton is expanding into adjacent growth markets. They will leverage their institutional relationships and brands to grow their educational services offerings, the education-related consumer market, the early childhood market, and the assessment market. Each are presently small businesses with, we think, large opportunities to grow.





The company will also selectively pursue acquisitions to enrich their content and overall growth profile. The company recently announced an acquisition of the Educational Technology business of Scholastic, which we believe will establish Houghton as the leader in the intervention market. We are excited about this transaction, since we think this is a top-notch offering and a natural fit, which the much larger Houghton salesforce can grow faster than its previous owner could. We believe the company paid a bargain price, especially after they realize the expected synergies.



We also favor the company’s compelling financial model. The company has been investing heavily in creating digital content and we think soon should reap the benefit of a significantly higher margin profile than when it was a pure print business. Accounting for the new business model is a little complicated since digital components, though paid for upfront, get deferred over the life of the contract for financial reporting. Thus, we look at this on an adjusted cash flow basis. We believe that metric will grow at a low double digit pace for the next five years. We believe they will generate significant free cash flow, which we expect to be used for acquisitions and stock buy backs, which already have started. At 10 times adjusted cash flow and 15 times free cash flow, conservative multiples that we think will be exceeded, and without any further acquisitions, we believe the stock should more than double over the next four years.





From Baron Funds’ second quarter 2015 commentary.



Check out Ron Baron latest stock trades

Top Ranked Articles about Houghton Mifflin Harcourt Co

Baron Funds Comments on Houghton Mifflin Harcourt Co. Guru stock highlight
Another recent purchase is Houghton Mifflin Harcourt Co. (NASDAQ:HMHC), a leader in K-12 educational content and services. It has globally recognized brands; rich, iconic and proven content; a reputation as an educational innovator; and a deep competitive moat around its franchise. After going through a pre-packaged bankruptcy in 2012, the company has brought in new management to lead the transition to a business model that incorporates digital instructive content. We think Houghton will benefit from a large and growing market, as educational budgets are augmented and the business relationship shifts from a lumpy textbook adoption cycle to a more sustainable digital subscription-based model. Read more...
Baron Funds Comments on Houghton Mifflin Harcourt Company
Houghton Mifflin Harcourt Company (NASDAQ:HMHC) is a global leader in Pre-K to 12 educational content and services. The company has dominant domestic market shares in reading, math and sciences, over 40% in the three largest areas of curriculum. They have globally recognized brands; rich, iconic and proven content; an established reputation as an educational innovator; and a deep competitive moat around their franchise. Read more...

Ratios

vs
industry
vs
history
P/B 1.46
HMHC's P/B is ranked lower than
51% of the 178 Companies
in the Global Education & Training Services industry.

( Industry Median: 1.41 vs. HMHC: 1.46 )
Ranked among companies with meaningful P/B only.
HMHC' s P/B Range Over the Past 10 Years
Min: 1.2  Med: 1.62 Max: 2.55
Current: 1.46
1.2
2.55
P/S 1.67
HMHC's P/S is ranked lower than
60% of the 181 Companies
in the Global Education & Training Services industry.

( Industry Median: 1.27 vs. HMHC: 1.67 )
Ranked among companies with meaningful P/S only.
HMHC' s P/S Range Over the Past 10 Years
Min: 1.61  Med: 2.05 Max: 2.79
Current: 1.67
1.61
2.79
PFCF 8.08
HMHC's PFCF is ranked higher than
76% of the 70 Companies
in the Global Education & Training Services industry.

( Industry Median: 14.23 vs. HMHC: 8.08 )
Ranked among companies with meaningful PFCF only.
HMHC' s PFCF Range Over the Past 10 Years
Min: 6.42  Med: 9.05 Max: 30.7
Current: 8.08
6.42
30.7
POCF 6.58
HMHC's POCF is ranked higher than
72% of the 109 Companies
in the Global Education & Training Services industry.

( Industry Median: 10.40 vs. HMHC: 6.58 )
Ranked among companies with meaningful POCF only.
HMHC' s POCF Range Over the Past 10 Years
Min: 5.53  Med: 7.78 Max: 18.87
Current: 6.58
5.53
18.87
EV-to-EBITDA 14.21
HMHC's EV-to-EBITDA is ranked lower than
76% of the 152 Companies
in the Global Education & Training Services industry.

( Industry Median: 8.37 vs. HMHC: 14.21 )
Ranked among companies with meaningful EV-to-EBITDA only.
HMHC' s EV-to-EBITDA Range Over the Past 10 Years
Min: 8  Med: 11.35 Max: 22
Current: 14.21
8
22
Current Ratio 2.33
HMHC's Current Ratio is ranked higher than
68% of the 141 Companies
in the Global Education & Training Services industry.

( Industry Median: 1.49 vs. HMHC: 2.33 )
Ranked among companies with meaningful Current Ratio only.
HMHC' s Current Ratio Range Over the Past 10 Years
Min: 2.3  Med: 2.67 Max: 2.93
Current: 2.33
2.3
2.93
Quick Ratio 1.98
HMHC's Quick Ratio is ranked higher than
64% of the 141 Companies
in the Global Education & Training Services industry.

( Industry Median: 1.48 vs. HMHC: 1.98 )
Ranked among companies with meaningful Quick Ratio only.
HMHC' s Quick Ratio Range Over the Past 10 Years
Min: 1.72  Med: 2.05 Max: 2.51
Current: 1.98
1.72
2.51
Days Inventory 89.55
HMHC's Days Inventory is ranked lower than
85% of the 78 Companies
in the Global Education & Training Services industry.

( Industry Median: 8.71 vs. HMHC: 89.55 )
Ranked among companies with meaningful Days Inventory only.
HMHC' s Days Inventory Range Over the Past 10 Years
Min: 81.09  Med: 81.90 Max: 96.53
Current: 89.55
81.09
96.53
Days Sales Outstanding 126.30
HMHC's Days Sales Outstanding is ranked lower than
87% of the 119 Companies
in the Global Education & Training Services industry.

( Industry Median: 31.73 vs. HMHC: 126.30 )
Ranked among companies with meaningful Days Sales Outstanding only.
HMHC' s Days Sales Outstanding Range Over the Past 10 Years
Min: 65.05  Med: 70.11 Max: 84.22
Current: 126.3
65.05
84.22
Days Payable 35.78
HMHC's Days Payable is ranked higher than
61% of the 100 Companies
in the Global Education & Training Services industry.

( Industry Median: 24.04 vs. HMHC: 35.78 )
Ranked among companies with meaningful Days Payable only.
HMHC' s Days Payable Range Over the Past 10 Years
Min: 22.71  Med: 41.62 Max: 51.62
Current: 35.78
22.71
51.62

Valuation & Return

vs
industry
vs
history
Price/Median PS Value 0.82
HMHC's Price/Median PS Value is ranked higher than
58% of the 161 Companies
in the Global Education & Training Services industry.

( Industry Median: 0.89 vs. HMHC: 0.82 )
Ranked among companies with meaningful Price/Median PS Value only.
HMHC' s Price/Median PS Value Range Over the Past 10 Years
Min: 0.84  Med: 1.02 Max: 1.28
Current: 0.82
0.84
1.28
Price/Graham Number 3.07
HMHC's Price/Graham Number is ranked lower than
81% of the 121 Companies
in the Global Education & Training Services industry.

( Industry Median: 1.08 vs. HMHC: 3.07 )
Ranked among companies with meaningful Price/Graham Number only.
HMHC' s Price/Graham Number Range Over the Past 10 Years
Min: 3.4  Med: 3.59 Max: 3.78
Current: 3.07
3.4
3.78
Earnings Yield (Greenblatt) (%) -5.08
HMHC's Earnings Yield (Greenblatt) (%) is ranked lower than
79% of the 145 Companies
in the Global Education & Training Services industry.

( Industry Median: 5.50 vs. HMHC: -5.08 )
Ranked among companies with meaningful Earnings Yield (Greenblatt) (%) only.
HMHC' s Earnings Yield (Greenblatt) (%) Range Over the Past 10 Years
Min: -5.1  Med: 0.60 Max: 0.7
Current: -5.08
-5.1
0.7

More Statistics

Revenue(Mil) $1384
EPS $ -0.83
Short Percentage of Float6.46%
52-Week Range $16.00 - 27.14
Shares Outstanding(Mil)134.30

Analyst Estimate

Dec15 Dec16
Revenue(Mil) 1,421 1,539
EPS($) -0.78 -0.74
EPS without NRI($) -0.78 -0.74

Business Description

Industry: Education » Education & Training Services
Compare: » details
» More Articles for HMHC

Headlines

Articles On GuruFocus.com
FPA Capital Fund Buys Sanderson Farms, Sells Barnes & Noble Jan 19 2016 
Baron Funds Comments on Houghton Mifflin Harcourt Co. Jan 14 2016 
Baron Funds Comments on Houghton Mifflin Harcourt Company Aug 19 2015 
Manning & Napier's Top 5 New Stock Buys of Q2 Jul 09 2015 
Scott Black Adds 12 New Positions During 1QFY15 To His Portfolio May 21 2015 
John Paulson Takes Giant Stakes in 3 Companies Feb 18 2014 
A First Class Publisher in the Education Market Feb 14 2014 

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