By: Mark Fitzgerald
Back in April, Barron’s said The Washington Post Co. “”may be the most undervalued media company in America,” with a share price that was “dirt cheap.” With the stock (NYSE: WPO) having plunged since then, the financial weekly repeated its assessment even more firmly over the weekend.
This time, it seems, investors listened. WPO spiked 6% in Monday’s trading, gaining $21.10, or 6%, to $368.70. Price swings of that size had been rare for Post Co. stock – until the company twice warned in the last couple of weeks that proposed federal laws on student loans could have a negative impact on its Kaplan education division.
Kaplan accounts for about two-thirds of the company’s total revenue and the Kaplan Higher Education unit — the business most likely to be hurt if students cannot use federal Title IV loans to attend its for-profit schools – just by itself generates 18% of total company revenue.
But Barron’s said Wall Street had overreacted to the news, and that Kaplan is worth more than the market’s current negative valuation.
During Monday’s session, WPO traded for as much as $375.74, well off its 52-week high of $547.58 established in January, but better than the 52-week low of $295.56 it hit earlier this month.
WPO’s peformance was all the more remarkable coming on a down day for its peers. All other newspaper companies trading on the Big Board recorded declines for the Monday session. With the broader markets down, too, WPO was the fifth-biggest percentage gainer in the NYSE.