Now Is A Suitable Moment For A Long-Term Purchase Of Houghton Mifflin Harcourt Company (NASDAQ: HMHC)

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Wellington Management Co. LLP recently announced the acquisition of new stake in Houghton Mifflin Harcourt Company (NASDAQ:HMHC). The institutional investor has increased its shareholding in the Consumer Defensive company by 2.02% to 15.36 million shares with purchase of 0.3 million shares. This fresh investment now brings its stake to 12.25% valued currently at $27.81 million. In addition, The Vanguard Group, Inc. raised its holdings by 78306.0 to 9.4 million shares. And Dimensional Fund Advisors LP has lifted its position by 3.25% or 0.21 million shares – to 6.81 million shares.

With over 1.52 million Houghton Mifflin Harcourt Company (HMHC) shares trading Tuesday and a closing price of $1.60 on the day, the dollar volume was approximately $2.43 million. The shares have shown a positive weekly performance of 6.67% and its price on 07/14/20 lost nearly -2.44%. Currently, there are 124.69M common shares owned by the public and among those 124.42M shares have been available to trade.

An analysis of what Wall Street brokers have to say about the expected price targets for this stock gives us this picture: 6 analysts who have offered their price forecasts for HMHC have a consensus price objective of $2.83. The analysts have set the share’s price value over the next 12 months at a high of $5.50 and a low of $1.00 should the stock experience a downside. Incidentally, analysts’ outlook for the Houghton Mifflin Harcourt Company stock is 3.20 for the next 12 months. But an upside of 70.91% will see the stock hit the forecast high price target while mean target price for the stock is $2.50.

Insiders at the company have transacted a total of 116 times over the past 12 months, according to data filed with the U.S. Securities and Exchange Commission (SEC). 62 of these insider trades were purchases, accounting for 822,783 shares. Insider sales of the common stock occurred on 54 occasions, with total insider shares sold totaling 351,491 shares.

The top 3 mutual fund holders in Houghton Mifflin Harcourt Company are Vanguard Explorer Fund, Vanguard Total Stock Market Index, and Vanguard Small Cap Index Fund. Vanguard Explorer Fund owns 7.2 million shares of the company’s stock, all valued at over $13.03 million. Vanguard Small Cap Index Fund sold 16905.0 shares to bring its total holdings to over 2.75 million shares at a value of $4.98 million. Vanguard Small Cap Index Fund now owns shares totaling to 2.19% of the shares outstanding.

Shares of Houghton Mifflin Harcourt Company (NASDAQ: HMHC) opened at $1.76, up $0.12 from a prior closing price of $1.64. However, the script later closed the day at $1.60, down -2.44%. The company’s stock has a 5-day price change of 6.67% and 26.98% over the past three months. HMHC shares are trading -74.40% year to date (YTD), with the 12-month market performance down to -70.48% lower. It has a 12-month low price of $1.03 and touched a high of $6.85 over the same period. Currently, 1.52 million shares have been traded, compared to an average intraday trading volume of 1.35 million shares. The stock is trading above its simple moving averages at the SMA20, SMA50, and SMA200, as the current price level is off by -12.30%, -6.92%, and -60.94% respectively.

Institutional ownership of Houghton Mifflin Harcourt Company (NASDAQ: HMHC) shares accounts for 98.30% of the company’s 124.69M shares outstanding. Mutual fund holders own 39.63%, while other institutional holders and individual stakeholders account for 58.23% and 36.24% respectively.

It has a market capitalization of $186.90M and a beta (3y monthly) value of 1.25. The earnings-per-share (ttm) stands at -$3.55. Price movements for the stock have been influenced by the stock’s volatility, which stands at 11.03% over the week and 10.65% over the month.

Analysts forecast that Houghton Mifflin Harcourt Company (HMHC) will achieve an EPS of -$0.3 for the current quarter, $0.47 for the next quarter and -$1 for 2021. The lowest estimate earnings-per-share for the quarter is -$0.46 while analysts give the company a high EPS estimate of -$0.24. Comparatively, EPS for the current quarter was -$0.33 a year ago. Earnings per share for the fiscal year are expected to decrease by -54.70%, and 69.40% over the next financial year. EPS should grow at an annualized rate of 5.00% over the next five years, compared to -16.80% over the past 5-year period.

If you are looking to buy this stock, then you may note that the average analyst recommendation by 6 brokerage firm advisors rate Houghton Mifflin Harcourt Company (HMHC) as a “Hold” at a consensus score of 3.20. Specifically, 1 Wall Street analysts polled rate the stock as a buy, while 4 of the 6 advise that investors “hold,” and 1 rated it as a “Sell.”

Looking at the support for the HMHC, a number of firms have released research notes about the stock. BMO Capital Markets stated their Market Perform rating for the stock in a research note on April 07, 2020, with the firm’s price target at $7-$3. Citigroup coverage for the Houghton Mifflin Harcourt Company (HMHC) stock in a research note released on April 03, 2020 offered a Sell rating with a price target of $1. Goldman was of a view on March 10, 2020 that the stock is Neutral, while Stifel gave the stock Hold rating on August 03, 2018, issuing a price target of $8- $7.50. Goldman on their part issued Sell rating on March 27, 2018.

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