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Also traded in: Germany

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 0.28
HMHC's Cash to Debt is ranked lower than
79% of the 159 Companies
in the Global Education & Training Services industry.

( Industry Median: 1.96 vs. HMHC: 0.28 )
Ranked among companies with meaningful Cash to Debt only.
HMHC' s Cash to Debt Range Over the Past 10 Years
Min: 0.13  Med: 1.27 Max: N/A
Current: 0.28
Equity to Asset 0.35
HMHC's Equity to Asset is ranked lower than
79% of the 156 Companies
in the Global Education & Training Services industry.

( Industry Median: 0.61 vs. HMHC: 0.35 )
Ranked among companies with meaningful Equity to Asset only.
HMHC' s Equity to Asset Range Over the Past 10 Years
Min: 0.33  Med: 0.59 Max: 0.64
Current: 0.35
0.33
0.64
F-Score: 5
Z-Score: -0.64
M-Score: -3.19
WACC vs ROIC
6.70%
-9.73%
WACC
ROIC
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 : 4/10

vs
industry
vs
history
Operating margin (%) -9.56
HMHC's Operating margin (%) is ranked lower than
82% of the 156 Companies
in the Global Education & Training Services industry.

( Industry Median: 6.78 vs. HMHC: -9.56 )
Ranked among companies with meaningful Operating margin (%) only.
HMHC' s Operating margin (%) Range Over the Past 10 Years
Min: -157.27  Med: -8.2 Max: -6.22
Current: -9.56
-157.27
-6.22
Net-margin (%) -14.05
HMHC's Net-margin (%) is ranked lower than
83% of the 158 Companies
in the Global Education & Training Services industry.

( Industry Median: 5.42 vs. HMHC: -14.05 )
Ranked among companies with meaningful Net-margin (%) only.
HMHC' s Net-margin (%) Range Over the Past 10 Years
Min: -168.48  Med: -8.12 Max: -6.78
Current: -14.05
-168.48
-6.78
ROE (%) -17.48
HMHC's ROE (%) is ranked lower than
84% of the 152 Companies
in the Global Education & Training Services industry.

( Industry Median: 6.90 vs. HMHC: -17.48 )
Ranked among companies with meaningful ROE (%) only.
HMHC' s ROE (%) Range Over the Past 10 Years
Min: -17.48  Med: -7.62 Max: -5.86
Current: -17.48
-17.48
-5.86
ROA (%) -6.48
HMHC's ROA (%) is ranked lower than
80% of the 160 Companies
in the Global Education & Training Services industry.

( Industry Median: 3.40 vs. HMHC: -6.48 )
Ranked among companies with meaningful ROA (%) only.
HMHC' s ROA (%) Range Over the Past 10 Years
Min: -66.86  Med: -3.78 Max: -2.77
Current: -6.48
-66.86
-2.77
ROC (Joel Greenblatt) (%) -57.13
HMHC's ROC (Joel Greenblatt) (%) is ranked lower than
86% of the 159 Companies
in the Global Education & Training Services industry.

( Industry Median: 18.82 vs. HMHC: -57.13 )
Ranked among companies with meaningful ROC (Joel Greenblatt) (%) only.
HMHC' s ROC (Joel Greenblatt) (%) Range Over the Past 10 Years
Min: -914.1  Med: -31.64 Max: 12.08
Current: -57.13
-914.1
12.08
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» HMHC's 10-Y Financials

Financials


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

» Details

Guru Trades

Q1 2016

HMHC Guru Trades in Q1 2016

Joel Greenblatt 295,470 sh (New)
Jim Simons 500,800 sh (+132.07%)
FPA Capital Fund 414,640 sh (+98.65%)
Manning & Napier Advisors, Inc 4,212,843 sh (+36.43%)
First Pacific Advisors 974,667 sh (+20.93%)
Ron Baron 1,980,200 sh (+13.15%)
Julian Robertson Sold Out
Scott Black 54,086 sh (-0.95%)
Keeley Asset Management Corp 1,340,831 sh (-18.96%)
Chuck Royce 108,459 sh (-50.43%)
Paul Tudor Jones 27,736 sh (-53.07%)
» More
Q2 2016

HMHC Guru Trades in Q2 2016

FPA Capital Fund 1,156,997 sh (+179.04%)
First Pacific Advisors 2,417,224 sh (+148.01%)
Chuck Royce 261,559 sh (+141.16%)
Ron Baron 2,000,000 sh (+1.00%)
Jim Simons Sold Out
Joel Greenblatt Sold Out
Paul Tudor Jones Sold Out
Manning & Napier Advisors, Inc 4,045,467 sh (-3.97%)
Keeley Asset Management Corp 1,184,460 sh (-11.66%)
Scott Black 47,366 sh (-12.42%)
» More
Q3 2016

HMHC Guru Trades in Q3 2016

Paul Tudor Jones 12,845 sh (New)
Chuck Royce 665,559 sh (+154.46%)
FPA Capital Fund 1,303,657 sh (+12.68%)
First Pacific Advisors 2,707,399 sh (+12.00%)
Scott Black Sold Out
Manning & Napier Advisors, Inc 3,681,473 sh (-9.00%)
Keeley Asset Management Corp 1,070,580 sh (-9.61%)
Ron Baron 500,000 sh (-75.00%)
» More
Q4 2016

HMHC Guru Trades in Q4 2016

FPA Capital Fund 1,433,507 sh (+9.96%)
» More
» Details

Insider Trades

Latest Guru Trades with HMHC

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Business Description

Industry: Education » Education & Training Services    NAICS: 611710    SIC: 8299
Compare:OTCPK:ECPCY, NAS:APOL, NAS:CPLA, NAS:STRA, NAS:TEDU, NYSE:LRN, NYSE:CHGG, NAS:CECO, NYSE:DV, NYSE:GPX, NYSE:BPI, NAS:APEI, NYSE:DL, NYSE:NORD, NYSE:COE, NYSE:FC, NAS:ABCD, NAS:HLG, OTCPK:AMBOY, NYSE:UTI » details
Traded in other countries:HM0.Germany,
Houghton Mifflin Harcourt Company provides content, services and technology to both educational institutions and consumers, reaching over 50 million students in more than 150 countries. It also published trade and reference materials.

Houghton Mifflin Harcourt Co was incorporated on March 5, 2010. The Company is engaged in the providing education solutions across a variety of media. It provides content, services and technology to both educational institutions and consumers, reaching over 50 million students in more than 150 countries. Company's intellectual property assets consist of its trademarks and copyrights in its content. It operates in the United States. Its competitors include Pearson Education, Inc., McGraw Hill Education, Cengage Learning, Inc., Scholastic Corporation and K12 Inc.

Guru Investment Theses on Houghton Mifflin Harcourt Co

Baron Funds Comments on Houghton Mifflin Harcourt - Aug 17, 2016

Houghton Mifflin Harcourt Company (NASDAQ:HMHC), a leading publisher of educational materials and solutions for K-12 schools, fell in the quarter over concerns about the pace of near-term growth. California appears to be stretching out the adoption of a new reading program, which will negatively impact company bookings and revenues this year. There are also some concerns about the market share the company will garner from this and other adoptions. We still believe that the company is on the cusp of significant growth in “post-plate” cash EBITDA, the metric of most import when valuing the business. We believe this will be driven by overall industry growth, the company maintaining its 40% market share of new orders, and the realization of much higher margins as the business gains scale and transforms from analog/print to digital/subscription. We believe the stock can increase multiple-fold if this plays out as we foresee, so we deem it worth the wait.





From Baron Funds' Small Cap Fund second quarter 2016 shareholder letter.



Check out Ron Baron latest stock trades

FPA Capital Comments on Houghton Mifflin - Aug 03, 2016

In terms of individual portfolio weightings, the largest percentage increase during the quarter was Houghton Mifflin (NASDAQ:HMHC), which more than doubled in size from a little over 1% at the end of the first quarter to roughly 2.5% by the end of June. HMHC declined nearly 22% in the quarter to $15.63, due primarily to concerns about how fast school districts would adopt new K-12 learning material and what the company’s “win rate” would be in the states awarding new contracts. We believe the stock has been overly discounted on these concerns and, trading at less than 10x free cash flow, represents a compelling value.

From FPA Capital Fund (Trades, Portfolio)'s second quarter 2016 commentary.

Check out FPA Capital latest stock trades

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.



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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

Houghton Mifflin Shares Cheap on Concerns Over Purchases by School Districts The Street is concerned about the publisher's school book sales in California, shares are down substantially
Book publisher Houghton Mifflin’s (NASDAQ:HMHC) shares are down substantially. Wall Street is concerned about school districts buying new books. It could be a good time to buy shares. Read more...
Baron Funds Comments on Houghton Mifflin Harcourt Guru stock highlight
Houghton Mifflin Harcourt Company (NASDAQ:HMHC), a leading publisher of educational materials and solutions for K-12 schools, fell in the quarter over concerns about the pace of near-term growth. California appears to be stretching out the adoption of a new reading program, which will negatively impact company bookings and revenues this year. There are also some concerns about the market share the company will garner from this and other adoptions. We still believe that the company is on the cusp of significant growth in “post-plate” cash EBITDA, the metric of most import when valuing the business. We believe this will be driven by overall industry growth, the company maintaining its 40% market share of new orders, and the realization of much higher margins as the business gains scale and transforms from analog/print to digital/subscription. We believe the stock can increase multiple-fold if this plays out as we foresee, so we deem it worth the wait. Read more...
FPA Capital Comments on Houghton Mifflin Guru stock highlight
In terms of individual portfolio weightings, the largest percentage increase during the quarter was Houghton Mifflin (NASDAQ:HMHC), which more than doubled in size from a little over 1% at the end of the first quarter to roughly 2.5% by the end of June. HMHC declined nearly 22% in the quarter to $15.63, due primarily to concerns about how fast school districts would adopt new K-12 learning material and what the company’s “win rate” would be in the states awarding new contracts. We believe the stock has been overly discounted on these concerns and, trading at less than 10x free cash flow, represents a compelling value. Read more...
FPA Capital Fund Buys More Shares of 5 Current Holdings Fund still likes companies it owns
The FPA Capital Fund (Trades, Portfolio) on Tuesday disclosed its investment activity for the second quarter which showed managers bought additional shares of seven holdings and bought no new holdings. Read more...

Ratios

vs
industry
vs
history
P/B 1.27
HMHC's P/B is ranked higher than
62% of the 149 Companies
in the Global Education & Training Services industry.

( Industry Median: 1.60 vs. HMHC: 1.27 )
Ranked among companies with meaningful P/B only.
HMHC' s P/B Range Over the Past 10 Years
Min: 1.1  Med: 1.68 Max: 2.55
Current: 1.27
1.1
2.55
P/S 0.98
HMHC's P/S is ranked higher than
66% of the 145 Companies
in the Global Education & Training Services industry.

( Industry Median: 1.54 vs. HMHC: 0.98 )
Ranked among companies with meaningful P/S only.
HMHC' s P/S Range Over the Past 10 Years
Min: 0.83  Med: 1.94 Max: 2.79
Current: 0.98
0.83
2.79
PFCF 24.95
HMHC's PFCF is ranked lower than
71% of the 56 Companies
in the Global Education & Training Services industry.

( Industry Median: 16.24 vs. HMHC: 24.95 )
Ranked among companies with meaningful PFCF only.
HMHC' s PFCF Range Over the Past 10 Years
Min: 6.39  Med: 11.55 Max: 36.16
Current: 24.95
6.39
36.16
POCF 7.74
HMHC's POCF is ranked higher than
77% of the 79 Companies
in the Global Education & Training Services industry.

( Industry Median: 12.03 vs. HMHC: 7.74 )
Ranked among companies with meaningful POCF only.
HMHC' s POCF Range Over the Past 10 Years
Min: 5.5  Med: 7.82 Max: 18.89
Current: 7.74
5.5
18.89
EV-to-EBITDA 11.69
HMHC's EV-to-EBITDA is ranked lower than
58% of the 117 Companies
in the Global Education & Training Services industry.

( Industry Median: 10.46 vs. HMHC: 11.69 )
Ranked among companies with meaningful EV-to-EBITDA only.
HMHC' s EV-to-EBITDA Range Over the Past 10 Years
Min: 8  Med: 12.7 Max: 21.8
Current: 11.69
8
21.8
Current Ratio 1.59
HMHC's Current Ratio is ranked higher than
53% of the 154 Companies
in the Global Education & Training Services industry.

( Industry Median: 1.46 vs. HMHC: 1.59 )
Ranked among companies with meaningful Current Ratio only.
HMHC' s Current Ratio Range Over the Past 10 Years
Min: 1.37  Med: 2.51 Max: 2.93
Current: 1.59
1.37
2.93
Quick Ratio 1.27
HMHC's Quick Ratio is ranked lower than
55% of the 154 Companies
in the Global Education & Training Services industry.

( Industry Median: 1.40 vs. HMHC: 1.27 )
Ranked among companies with meaningful Quick Ratio only.
HMHC' s Quick Ratio Range Over the Past 10 Years
Min: 0.94  Med: 2.03 Max: 2.51
Current: 1.27
0.94
2.51
Days Inventory 86.57
HMHC's Days Inventory is ranked lower than
82% of the 87 Companies
in the Global Education & Training Services industry.

( Industry Median: 6.78 vs. HMHC: 86.57 )
Ranked among companies with meaningful Days Inventory only.
HMHC' s Days Inventory Range Over the Past 10 Years
Min: 78.7  Med: 81.9 Max: 96.53
Current: 86.57
78.7
96.53
Days Sales Outstanding 112.04
HMHC's Days Sales Outstanding is ranked lower than
88% of the 119 Companies
in the Global Education & Training Services industry.

( Industry Median: 35.14 vs. HMHC: 112.04 )
Ranked among companies with meaningful Days Sales Outstanding only.
HMHC' s Days Sales Outstanding Range Over the Past 10 Years
Min: 65.05  Med: 72.21 Max: 112.04
Current: 112.04
65.05
112.04
Days Payable 38.83
HMHC's Days Payable is ranked higher than
64% of the 99 Companies
in the Global Education & Training Services industry.

( Industry Median: 25.45 vs. HMHC: 38.83 )
Ranked among companies with meaningful Days Payable only.
HMHC' s Days Payable Range Over the Past 10 Years
Min: 22.71  Med: 41.84 Max: 51.62
Current: 38.83
22.71
51.62

Buy Back

vs
industry
vs
history

Valuation & Return

vs
industry
vs
history
Price/Median PS Value 0.50
HMHC's Price/Median PS Value is ranked higher than
87% of the 135 Companies
in the Global Education & Training Services industry.

( Industry Median: 0.96 vs. HMHC: 0.50 )
Ranked among companies with meaningful Price/Median PS Value only.
HMHC' s Price/Median PS Value Range Over the Past 10 Years
Min: 0.5  Med: 1.04 Max: 1.36
Current: 0.5
0.5
1.36
Earnings Yield (Greenblatt) (%) -7.22
HMHC's Earnings Yield (Greenblatt) (%) is ranked lower than
81% of the 152 Companies
in the Global Education & Training Services industry.

( Industry Median: 4.50 vs. HMHC: -7.22 )
Ranked among companies with meaningful Earnings Yield (Greenblatt) (%) only.
HMHC' s Earnings Yield (Greenblatt) (%) Range Over the Past 10 Years
Min: -7.41  Med: 0.6 Max: 0.7
Current: -7.22
-7.41
0.7

More Statistics

Revenue (TTM) (Mil) $1,429
EPS (TTM) $ -1.56
Beta0.61
Short Percentage of Float3.80%
52-Week Range $9.15 - 21.08
Shares Outstanding (Mil)123.01

Analyst Estimate

Dec16 Dec17
Revenue (Mil $) 1,331 1,553
EPS ($) -1.27 -0.86
EPS w/o NRI ($) -1.27 -0.86
EPS Growth Rate
(3Y to 5Y Estimate)
N/A
Dividends Per Share ($)
» More Articles for HMHC

Headlines

Articles On GuruFocus.com
Bob Rodriguez's Former Fund Urges Caution, Keeps Buying 4 Stocks Jan 12 2017 
Houghton Mifflin Shares Cheap on Concerns Over Purchases by School Districts Oct 10 2016 
FPA Capital Fund Adds to 5 Holdings in 3rd Quarter Oct 10 2016 
Baron Funds Comments on Houghton Mifflin Harcourt Aug 17 2016 
FPA Capital Comments on Houghton Mifflin Aug 03 2016 
FPA Capital Fund 2nd Quarter 2016 Commentary Aug 03 2016 
FPA Capital Fund Continues to Buy Western Digital, Veeco Jul 29 2016 
FPA Capital Fund Increases 5 of Its Current Holdings Jul 13 2016 
FPA Capital Fund Buys Sanderson Farms, Sells Barnes & Noble Jan 19 2016 
Baron Funds Comments on Houghton Mifflin Harcourt Co. Jan 14 2016 

More From Other Websites
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Houghton Mifflin Harcourt Co (HMHC): Anchorage Advisors Boosts Stake, Gets Board Seat Dec 27 2016
ETFs with exposure to Houghton Mifflin Harcourt Co. : December 23, 2016 Dec 23 2016
Houghton Mifflin Harcourt Appoints Daniel Allen to Board of Directors Dec 22 2016
Houghton Mifflin Harcourt Appoints Daniel Allen to Board of Directors Dec 22 2016
HOUGHTON MIFFLIN HARCOURT CO Files SEC form 8-K, Entry into a Material Definitive Agreement, Change... Dec 22 2016
[$$] For Large Stock Gains, Think Small Dec 17 2016
Hedge Funds Are Dumping Houghton Mifflin Harcourt Co (HMHC) Dec 09 2016
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Houghton Mifflin Harcourt (Nasdaq: HMHC) to Ring The Nasdaq Stock Market Closing Bell Dec 06 2016
Houghton Mifflin Harcourt Launches New Social Studies Program for Grades 6-12 Dec 01 2016
Houghton Mifflin Harcourt Launches New Social Studies Program for Grades 6-12 Nov 30 2016
What Makes Houghton Mifflin Harcourt (HMHC) a Strong Sell? Nov 22 2016
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[$$] Houghton Mifflin Turns a New Page After Bad Year Nov 17 2016
HOUGHTON MIFFLIN HARCOURT CO Financials Nov 09 2016
HMH Names Asbury Park Intervention District of Excellence for Holistic Approach to Advancing... Nov 07 2016

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