Graham Holdings Company: Good Business Culture, Poor Business Execution

Oct. 16, 2023 12:23 PM ETGraham Holdings Company (GHC) StockGHC8 Comments
Horizon Capital
713 Followers

Summary

  • Graham Holdings Company has a long history of business success due to its ability to successfully pivot its business in big ways.
  • However, the current management team has demonstrated less ability to allocate capital effectively. On top of this, I think the company has a relatively low-quality portfolio of businesses.
  • I would prefer to invest in the business at 10x my estimate of the current two-year average of free cash flow per share, or $490.
  • In this article, I will discuss my thought process behind this price target, and provide an overview of the company's past decade of operations.
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Graham Holdings Company (NYSE:GHC) has a long history of business success despite going through many transformations that have changed the way the company looks. The company’s longevity alone is remarkable, but coupled with the fact that it has pivoted its business

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713 Followers
I am an equity analyst and value investor, and I believe that every security has a price at which it is an attractive investment. I believe I have an edge because I am willing to explore stocks that most other investors are ignoring, and because I am not afraid to invest in stocks that are illiquid and thinly traded.I tend to focus on small cap and micro cap stocks but I write about stocks of all sizes. I take a bottoms up approach to my research but I consider economic factors in my analysis in order to create a more holistic view of the stock and business in question.I have a background in economics and 6 years of experience as an analyst. I look forward to sharing my research with my followers on Seeking Alpha as I continue to learn more over the years. I post smaller and more frequent updates on Twitter regarding some of the stocks and businesses I have researched and written about on Seeking Alpha. Please follow me @HorizonCapital1 if you wish to see these updates in addition to my general thoughts on the economy, markets and anything else I find interesting.

Analyst’s Disclosure:I/we have no stock, option or similar derivative position in any of the companies mentioned, but may initiate a beneficial Long position through a purchase of the stock, or the purchase of call options or similar derivatives in GHC over the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

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