An article in the latest issue of Barrons profiled the Lord Abbett Small-Cap Value fund, describing its investment philosophy and listing several stocks, including SCHL, that have a prominent place in its portfolio. Since the Napeague Letter researches undervalued small-cap stocks, a thumbnail analysis of each of these stocks was included in its most recent issue:
Scholastic Corporation (NASDAQ:SCHL) is a global children's publishing and media company that creates and distributes innovative, quality educational materials for use in schools and homes, including children's books, textbooks, magazines, technology, teacher materials, television programming, videos and toys. Or, to put it another way, they have the U.S. rights to the "Harry Potter" series.
And everybody loves "Harry Potter." After fairly bland financial performance over the last five years, the Company's revenues and earnings accelerated upward in 1999 and 2000. And the half dozen analysts who follow this stock feel that this trend will continue, although at a somewhat slower rate. Their recommendations are evenly divided between "Buy" and "Strong Buy."
Once again, the valuation tools used by The Napeague Letter indicate that SCHL's fundamentals can support a market valuation above $90.00, as compared to its closing price of $71.94 on November 25th. From a technical point of view however, after reaching a high at the $80.00 mark at the end of September this stock began to drift downward, although this may be the result of broader market conditions. Because of its visibility in the Barrons article, it is a likely candidate for a "Barrons bounce," but its subsequent strength and direction are more important investment criteria.
If you would like to see all of these analyses, you can find the URL for The Napeague Letter by clicking on the blue "Bob Davis" at the top of this post. |
