Opinions
Keith Richards
Scholastic Corp.
SCHL-Q
WATCH
May 27, 2014
Stock price when the opinion was issued
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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.
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.
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.