PSON – not much of a showing there

PSON (Pearson) is a publishing company specialising in the educational sector. It also owned the FT, which was sold off in July to Nikkei fo £844m.

PSON’s shares plunged 10.6% on 21-Oct-2015, from 1188p to 998.5p on release of its IMS, stating “our largest markets [are] weaker than we expected with, in particular, lower Community College enrolments and higher returns affecting the US higher education market; and lower purchasing in certain provinces affecting the school textbook market in South Africa”.

Shares closed at 861.5p yesterday. It has a Stock Rank of 41, has a PE of 12, and a yield of 6.53%.

Stockopedia records its 5-year mean ROCE to be 7.3%, with the latest figure being 3.7%. I regard that as being quite poor.

It has an RS6m of -28.6%, putting it in the lowest momentum decile. That puts it firmly in “the danger zone”, and I personally would not buy, even for a 6-month trade.

PSON is too stodgy, with a poor track record of returns of capital. It’s difficult to see much attraction in it, especially after the announcement they just made.

As ever, we shall see.

861.5p

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About mcturra2000

Computer programmer living in Scotland.
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