MHP
Every Wednesday, we publish our “Investor Toolkit” series on TSI Network. Whether you’re a beginning or experienced investor, these weekly updates are designed to give you specific advice, in this case showing you how we judge winning stock picks. Each Investor Toolkit update gives you a fundamental piece of investing strategy, and shows you how you can put it into …read more »
McGraw-Hill Companies Inc., New York symbol MHP, rose 17% the week of September 12 after it announced that it will split into two separate, publicly traded companies.
One of these new firms, McGraw-Hill Markets, will sell a variety of financial-information products. This business will include Standard & Poor’s, which provides credit ratings on bonds, and McGraw-Hill’s J.D. Power market-research firm. …read more »
MCGRAW-HILL COMPANIES INC. $38 (New York symbol MHP; Conservative Growth Portfolio, Consumer sector; Shares outstanding: 307.0 million; Market cap: $11.7 billion; Price-to-sales ratio: 1.9; Dividend yield: 2.6%; TSINetwork Rating: Average; www.mcgraw-hill.com) gets 70% of its earnings and 45% of its revenue from its Standard & Poor’s division, which provides financial information, including credit ratings on bonds. The company also publishes …read more »
New regulations in the wake of the financial crisis will push up costs for these three leading credit-rating providers. However, they face little competition, and they continue to benefit from falling computer costs and the shift to electronic document delivery. These savings are also letting them raise their dividends.
MCGRAW-HILL COMPANIES INC. $38 (New York symbol MHP; Conservative Growth Portfolio, …read more »
Under the new financial-reform law, the Securities and Exchange Commission will develop rules to prevent conflicts of interest in the credit rating industry. The law also creates new standards for credit analysts, including passing qualifying examinations.
The new law will raise these three rating providers’ costs. However, all three have improved the quality of their ratings since the 2007/2008 financial crisis. …read more »
INVACARE CORP. $25 (New York symbol IVC; Conservative Growth Portfolio, Consumer sector; Shares outstanding: 32.3 million; Market cap: $807.5 million; Price-to-sales ratio: 0.5; Dividend yield: 0.2%; WSSF Rating: Average) makes wheelchairs, motorized scooters and other mobility and home-care products.
The company may have to pay $12 million to $14 million a year in new taxes. That’s because the U.S. Senate recently …read more »
MCGRAW-HILL COMPANIES LTD. $32 (New York symbol MHP; Conservative Growth Portfolio, Consumer sector; Shares outstanding: 314.8 million; Market cap: $10.1 billion; Price-to-sales ratio: 1.6; WSSF Rating: Average) will make over 100 of its college textbooks available to users of the Kindle and Kindle DX electronic-book readers sold by online bookseller Amazon.com. That’s on top of the over 3,000 McGraw-Hill business, …read more »
MCGRAW-HILL COMPANIES LTD. $38 (New York symbol MHP; Conservative Growth Portfolio, Consumer sector; Shares outstanding: 320.7 million; Market cap: $12.2 billion; WSSF Rating: Average) has three main operations: financial information under the Standard & Poor’s brand (45% of sales in 2007, 75% of profit); school textbooks (40%, 22%); and the media division which includes BusinessWeek magazine and four TV stations …read more »
These three credit rating companies make money by providing investors with information that will help them make better decisions. However, big writedowns of securities backed by subprime mortgages in the past few months have hurt the liquidity of old bonds as well as demand for new bonds.
Unexpected writedowns of investment grade securities have also prompted investors to sue the rating …read more »
MCGRAW-HILL COMPANIES LTD. $63 (New York symbol MHP; Conservative Growth Portfolio, Consumer sector; Shares outstanding: 351.3 million; Market cap: $22.1 billion; WSSF Rating: Average) has three main operations: school textbooks (40% of sales in 2006, 21% of profit); financial information under the Standard & Poor’s brand (44%, 76%); and the media division which includes BusinessWeek magazine and four TV stations …read more »
