Pearson Share Discussion Threads

[redips2] 18/11/2015 15:33

Just wondering if the penny has dropped here .

[smithie6] 17/11/2015 15:00

@fulltimeinvest has tweeted about Pearson today

[redips2] 16/11/2015 13:51

Still watching......and this is an OK'ish day .

[she-ra] 15/11/2015 18:48

Bottomfisher - Or they will probably dump soon.

[deanforester] 13/11/2015 17:35

Added a few today, having trimmed BT.A back by 25%. Gave me 27% extra, which will improve the income flow, all being well.

[bottomfisher] 13/11/2015 16:24

Latest commentary by Nick Train, in his monthly report for Finsbury Growth and Income Trust, one of the better performing investment trusts, offers some slight reassurance that the market may be overreacting to the recent profit warning.


Pearson’s share price is not where we want or expected it to be. As with all our holdings we continually reassess our investment thesis and engage with management when business performance or strategy decisions surprise us. We have had more such engagement with Pearson over the last few years than any other holding – up to and including a conference call with the CEO and CFO last month to discuss the most recent earnings shortfall. It would be wrong to say that this call or indeed previous meetings have given us complete confidence about the validity of the Pearson investment idea; although there are few absolute certainties in any business. However, we continue to think the company offers a unique opportunity to participate in what should be a rewarding theme. In summary of our aspirations I quote below a paragraph from an analyst report on Pearson published 22/10/15; the day after the profit downgrade; a report which otherwise is in no way overoptimistic.

"In the long run, educational outcomes still matter and governments will continue to be under pressure to raise student and school performance, technology represents the only tool for governments to improve these outcomes. Also, as technology plays a larger role, the education publishing business, which historically reached scale economies at national levels, will become more and more global. Pearson’s larger size and investment in technology should lead to gaining share and becoming increasingly profitable."

We are invested in a number of companies which own or create what we analyse to be rare or "must-have" Intellectual Property. And we have deliberately looked for those with, in addition, an opportunity to use digital technology to extend the reach of their IP and its utility for customers. Some of these ideas have already been successful for our clients – for instance Disney, Intuit, Reed and Sage. Pearson seems to us to still fit these criteria. We understand and share the frustration of investors that Pearson’s 2016 earnings per share are likely to be closer to 65p than the £1.20 that was hoped for a couple of years ago. But we also want to remember that sentiment and stock market ratings can change quickly. Let’s say – wholly for the sake of argument that Pearson earnings bottom at 60p in two years’ time. But that those 60p of earnings have become high margin, cash generative Edtech profits, offering secular, not cyclical, growth well in excess of GDP. Those earnings might command a 25x P/E and support a share price of £15. This is not far-fetched: secular growth is rare in world stock markets today and very highly valued where it is recognised. We will hunker down with our holding in Pearson.

[redips2] 13/11/2015 13:54

Could be bb......still watching .

[bookbroker] 13/11/2015 09:41

Bought, this is starting to look value, Penguin will more likely be put on the block soon!

[redips2] 12/11/2015 15:25

No.....keep watching.

[bookbroker] 01/11/2015 07:41

And high levels of debt add extra pressure!

[bookbroker] 01/11/2015 07:40

No, no, no, the only this business effectively has now is educational learning, they are well behind the curve in the changes occurring, either they front up or they raise a 'For Sale' flag, otherwise they are going to be squeezed out, their old fashioned ideas not in keeping with the fast pace of change!

[redips2] 28/10/2015 10:08

" invest capital quickly "......A fool and his money, etc. I think due consideration with the quite considerable proceeds is required .

[bottomfisher] 26/10/2015 14:55

Like the sound of the new chairman. Given that the US is the biggest source of Pearson's revenues it makes sense to recruit a well-connected US business leader and Pearson seems to have bagged a big hitter.

[dealy] 25/10/2015 08:52

I agree bench. I read some analysts report that had the perverse belief that the company shouldn't have sold the FT because without it it has fewer growth prospects. Ignoring the fact that they sold it for 35 times earnings when the whole group is trading at just 12 times.

[bench2] 24/10/2015 15:15

It looks a sitting duck once they get the proceeds from the excellent sale of the FT and Economist . Now a far cry from Viscount Cowdray's sprawling conglomerate . Reed now RELX have shown how to digitise content but that was very high value legal / scientific , not so sure there is a sufficient moat around the US education biz to do the same

[little beaker] 23/10/2015 15:55

FWIW I think it's about fairly valued now - 12.x current year earnings sounds about right with the current doubts about future growth in their business model.

Still think they should cut the divi --- pay a special for the sale of FT and economist and rebase the normal divi lower to say a 3% yield, they need to manage debt levels.

I think people will be waiting for the future guidance following FY results - there's a real lack of visibility given the Q3 lfl declines.

[redips2] 23/10/2015 15:26

I tend to agree re: lower, but will wait until Monday before making a decision .

[tsmith2] 23/10/2015 15:21

Trading opp

[peterbill] 23/10/2015 13:56

Just added more. IMHO this is oversold, but could go lower on a day that the general market is down.

[bookbroker] 23/10/2015 10:05

Future of education through the cloud, wait for Bezos to make a move!

[bookbroker] 23/10/2015 10:04

Entry point will be around £7.50!

[salpara111] 23/10/2015 10:02

Well, it has blown through the £10 support line so I don't know where it will settle.
I am keeping an eye on them but equally the management seem to be pretty lacklustre in that they seem to be just sitting there saying that their main markets have been stalled for several years....well why aren't they looking at other opportunities? they are paid a boat load of money to drive the business forward.

[tsmith2] 23/10/2015 08:52

Would like to see some v decent management buying