Graham Holdings' Inorganic Story Continues - Analyst Blog

Graham Holdings Company (GHC) has grown into a diversified media and education company through acquisitions. The company has a strategy to invest in companies with proven earnings potential and strong management teams.

Last week, Graham Holdings acquired Joyce/Dayton Corp., a manufacturer of screw jacks and other linear motion systems, for an undisclosed amount. Joyce's products are incorporated into equipment used in solar energy generation, satellite antennas and natural gas fracking.

Headquartered in Washington, D.C., Graham Holdings operates through a mix of education, media, publishing and other smaller companies. Its subsidiaries include Kaplan — a provider of educational services; Post–Newsweek Stations, Inc. — owns six TV stations across the U.S.; Cable One, Inc. — a leading U.S Cable Company; The Slate Group and Foreign Policy Group — publishes online and print magazines and websites; SocialCode — a marketing solutions provider; Celtic Healthcare — provider of home health and hospice services; Trove — a digital innovation team and Forney Corporation — a global supplier of products and systems to control and monitor combustion processes in electric utility and industrial application.

Earlier this year, Graham Holdings acquired a small business in the Kaplan education division. In April, Celtic Healthcare acquired VNA-TIP Healthcare, a provider of home health and hospice services in Missouri and Illinois.

During 2013, Graham Holdings acquired six businesses totaling approximately $23.8 million. In Aug 2013, the company acquired Forney. The company also acquired four small businesses in other businesses and one small business in the Kaplan division. In the second quarter of 2013, Kaplan purchased the remaining 15% non-controlling interest in Kaplan China.

In the fourth quarter of 2013, the company divested its newspaper publishing businesses, including The Washington Post and its related website to Nash Holdings.

Other Stocks to Consider

Graham Holdings has not been assigned a Zacks Rank yet. Other stocks in the education industry that are worth considering include DeVry Education Group, Inc. DV, Strayer Education, Inc. STRA and Lincoln Educational Services Corporation LINC. While Lincoln Educational sports a Zacks Rank #1 (Strong Buy), Strayer and DeVry have a Zacks Rank #2 (Buy).

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