Stockchase Opinions

Jon Vialoux Scholastic Corp. SCHL-Q TOP PICK Apr 22, 2014

The bulk of their operating income comes in the quarter from September through to November, the start of the school season. The period of seasonal strength will obviously run from now, the end of April, all the way to September 30. The average gain for this company is 14.3%. There have only been 2 times where it has been negative in its 22 year history.

$33.350

Stock price when the opinion was issued

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TOP PICK
World’s oldest publishing/distribution, primarily children’s education and media. 1.17% yield but have potential to grow it 30%-50%. Will generate $100 million in free cash flow. Trades at about only 4.8X enterprise to cash flow. Strong balance sheet with virtually no debt.
PAST TOP PICK
(A Top Pick Sept 10/10. Up 6.7%.)
WATCH

Chart showed the stock had formed a base last year and then broke out. However, its breakout looks like it is failing. The stock is doing lower highs and lower lows.

PAST TOP PICK

(A Top Pick April 22/14. Up 7.76%.) This tends to do well from May all the way through to September. The bulk of its earnings and income is generated from September through to November. Continues to be a Hold. The trend is still positive.

BUY

He owns it in a smaller cap fund. They are the largest printer of children’s content in the world. They have great real estate in Manhattan. They reported last night and EPS and revenue were down a bit. But a better metric is price to cash flow and he likes it. They have no debt. In a couple of years this company could be taken out by a larger entity.