FPA Capital nearly tripled its stake in Houghton Mifflin Harcourt Co. during the second quarter, adding an addional 742,357 shares. The trade had a 2.19% impact on the FPA Capital Portfolio.
Houghton Mifflin Harcourt Co. is a global learning company that specializes in providing media based content, services, and technology to more than 50 million students across 150 countries worldwide. The company is focused on providing learning opportunity for students grades kindergarten to grade 12. Houghton Mifflin Harcourt has a portfolio of educational, general interest, children’s and reference works. The portfolio has been 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 $2.06 billion, an enterprise value of $2.6 billion, a P/B ratio of 2.05 and a P/B ratio of 2.05.
FPA Capital may have noticed the following items before it tripled its stake in Houghton Mifflin Harcourt:
- Houghton Mifflin Harcourt is providing learning opportunity to more than 50 million students worldwide. This will have a positive, lasting impact, on improving the lives of millions of people worldwide.
- Houghton Mifflin Harcourt's price is close to its Dec. 13, 2013, low of $15.89 per share.
- The company’s P/S ratio is close to its three-year low. Houghton Mifflin Harcourt's current P/S Ratio is 1.58, which is close to its three-year low of 1.46
- The company has a diversified portfolio of digital products, combined with content development or distribution agreements with powerful Fortune 500 companies such as Apple, Google, Intel and Microsoft.
During the first quarter Baron Funds commented on Houghton Mifflin Harcourt:
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.
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Disclosure: author does not own any shares of this company.
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