NEW YORK, April 4 (Reuters) - Washington Post Co, a longtime holding of Warren Buffett's Berkshire Hathaway Inc , may be the most undervalued U.S. media company, and its stock could be worth double where it trades now, newspaper Barron's said in its April 5 edition.
The company, controlled by the Graham family, is worth $8.5 billion, but has a 'dirt cheap' market value of only $4.2 billion because investors are giving it virtually no credit for Kaplan, an education unit that generates more than half the company's revenue and profit, Barron's reported.
It estimated that Kaplan is worth $5 billion, or about twice its $2.6 billion of revenue in 2009, which would make it less expensive than well-run rivals DeVry Inc and Strayer Education Inc.
The Washington Post's cable TV operations are worth an estimated $2 billion, TV stations an estimated $1 billion and its namesake paper and the magazine Newsweek worth zero, Barron's said.
A spinoff of Kaplan is the best way to boost Washington Post's share price, but the Graham family does not believe a spinoff is in shareholders' best interests, Barron's said.
Even absent a spinoff, the newspaper said Washington Post shares could rise once investors give it credit for Kaplan, and if share repurchases increase under a new authorization to buy back 8 percent of the company's stock.
Washington Post shares closed Thursday at $444.74 on the New York Stock Exchange. The stock market was closed for Good Friday.
(Reporting by Jonathan Stempel; Editing by Leslie Adler) Keywords: WASHINGTONPOST/BARRONS (jon.stempel@thomsonreuters.com +1 646 223 6317; Reuters Messaging: jon.stempel.reuters.com@reuters.net) COPYRIGHT Copyright Thomson Reuters 2010. All rights reserved. The copying, republication or redistribution of Reuters News Content, including by framing or similar means, is expressly prohibited without the prior written consent of Thomson Reuters.
The company, controlled by the Graham family, is worth $8.5 billion, but has a 'dirt cheap' market value of only $4.2 billion because investors are giving it virtually no credit for Kaplan, an education unit that generates more than half the company's revenue and profit, Barron's reported.
It estimated that Kaplan is worth $5 billion, or about twice its $2.6 billion of revenue in 2009, which would make it less expensive than well-run rivals DeVry Inc and Strayer Education Inc.
The Washington Post's cable TV operations are worth an estimated $2 billion, TV stations an estimated $1 billion and its namesake paper and the magazine Newsweek worth zero, Barron's said.
A spinoff of Kaplan is the best way to boost Washington Post's share price, but the Graham family does not believe a spinoff is in shareholders' best interests, Barron's said.
Even absent a spinoff, the newspaper said Washington Post shares could rise once investors give it credit for Kaplan, and if share repurchases increase under a new authorization to buy back 8 percent of the company's stock.
Washington Post shares closed Thursday at $444.74 on the New York Stock Exchange. The stock market was closed for Good Friday.
(Reporting by Jonathan Stempel; Editing by Leslie Adler) Keywords: WASHINGTONPOST/BARRONS (jon.stempel@thomsonreuters.com +1 646 223 6317; Reuters Messaging: jon.stempel.reuters.com@reuters.net) COPYRIGHT Copyright Thomson Reuters 2010. All rights reserved. The copying, republication or redistribution of Reuters News Content, including by framing or similar means, is expressly prohibited without the prior written consent of Thomson Reuters.