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.


About mcturra2000

Computer programmer living in Scotland.
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