The McGraw-Hill Companies, Inc. (MHP)

notzia (78.15) Submitted: 1/23/2009 11:27:45 AM : Start Price: $19.36 MHP Score: +16.41

Synergy from several sources suggest that this stock is a buy.

Return on equity and return on working capital has exceeded 20% for each of the last 6 years, with at least half of the years above 30%.
EPS has generally been growing since 1999.

With a share price of $20.79:
- A DCF approach suggests a 84% discount to share value
- A Grahamian approach suggests a 73% discount to share value
- A Buffett style approach based on historical EPS growth suggests a 19.9% projected compounded total return; a sustainable growth suggests a 20.9% projected compounded total return.

Magic Formula Investing included this stock in its top 100 (1/20/2009).

Cramer, on 1/28/2008 said “The stock is very inexpensive. If you think that structured product can come back at all, you've got a real winner. I want to wait. I think you get paid to wait.” Since then, the price is less than half what it was then. It has now become what Cramer refers to as an accidentally high dividend stock. The question still on the table, though, is whether a structured product can come back.