Graham Holdings Company (GHC): A Bull Case Theory

We came across a bullish thesis on Graham Holdings Company on Quality Value Investing’s Substack by David J. Waldron. In this article, we will summarize the bulls’ thesis on GHC. Graham Holdings Company's share was trading at $1104.72 as of December 2nd. GHC’s trailing P/E was 6.69 according to Yahoo Finance.

Graham Holdings Company (NYSE: GHC) is a diversified, family-controlled conglomerate operating across education, media, healthcare, industrial, and consumer services. Formerly known as The Washington Post Company, GHC rebranded in 2013 and now runs businesses spanning Kaplan’s education services, local TV broadcasting through Graham Media Group, home healthcare and hospice operations, manufacturing, and digital media assets like Slate and Foreign Policy.

Its education segment remains a cornerstone, leveraging Kaplan’s well-established brand in standardized test preparation and professional licensing, though competition from digital, low-cost players pressures margins. Meanwhile, Graham Media’s local TV stations benefit from government licensing and retransmission fee protections, creating effective monopolies within local markets.

The healthcare business operates in a fragmented sector where local relationships and referral patterns create temporary barriers, while manufacturing and other niche operations face more competitive environments. The company also benefits from disciplined capital allocation, including a significant investment portfolio and an undisclosed stake in Berkshire Hathaway.

Financially, GHC has demonstrated steady growth with five-year annualized revenue expansion in the low double digits and positive profit margins, though both lag broader market benchmarks. Management’s capital discipline is reflected in a solid return on equity that exceeds internal thresholds, an ROIC above its cost of capital, and ongoing share repurchases — with nearly half a million shares still authorized for buyback.

Strong free cash flow generation and exceptional recent EPS growth of over 200% highlight management’s effectiveness and shareholder alignment. Supported by diversified earnings streams, effective capital deployment, and undervalued shares, Graham Holdings presents a bullish long-term investment opportunity.

Previously we covered a bullish thesis on Coursera, Inc. (COUR) by Unemployed Value Degen in November 2024, which highlighted the company’s scalable edtech platform, strong cash position, and AI-driven growth potential. The company’s stock price has appreciated approximately by 3.79% since our coverage. This is because investor sentiment improved toward education platforms. David J. Waldron shares a similar perspective but emphasizes Graham Holdings’ diversified education exposure through Kaplan.

Graham Holdings Company is not on our list of the 30 Most Popular Stocks Among Hedge Funds. As per our database, 20 hedge fund portfolios held GHC at the end of the second quarter which was 20 in the previous quarter. While we acknowledge the potential of GHC as an investment, we believe certain AI stocks offer greater upside potential and carry less downside risk. If you're looking for an extremely undervalued AI stock that also stands to benefit significantly from Trump-era tariffs and the onshoring trend, see our free report on the best short-term AI stock.

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Disclosure: None.