Home » VectorVest » Harry Potter still casts a spell over Bloomsbury Publishing #BMY revenues. Buy in run up to FY results next month, says VectorVest.

Harry Potter still casts a spell over Bloomsbury Publishing #BMY revenues. Buy in run up to FY results next month, says VectorVest.

London based Bloomsbury Publishing Plc (BMY.L) is a leading independent publishing house established in 1986. It has companies in London, New York, Sydney and Delhi. It publishes media and electronic reference material, children books, fiction and non-fiction books, audiobooks, scholarly imprints, library of reference materials, educational books, dictionary and language books, literary, adult non-fiction books, academic books and journals, and sports yearbooks.

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On March 19th2018, BMY published a trading update for the year ended 28 February 2018. The company said that revenues will be slightly ahead of expectations, but profits will be well ahead of the Board’s expectations. This follows excellent sales, particularly in January and February, with lower than anticipated returns, driven by certain titles including Tom Kerridge’s Lose Weight For Good, which has been number one in the Overall Nielsen BookScan UK chart for four weeks since its publication on December 28th 2018. In addition, the net cash balance is now expected to be around £25m, significantly ahead of expectations. Final results for the year will be published on 22 May 2018.

An upward move in the GRT (Earnings Growth Rate) metric was picked up by VectorVest as far back as October 2017. This growth continued all the way through to today’s GRT rating of 22%, which VectorVest considers to be excellent. Although the RS (Relative Safety) metric only registers a fair rating of 1.00 (scale of 0.00 to 2.00), trading at 183p the stock is still way below the current VectorVest valuation of 219p per share.

A weekly chart of BMY.L is shown above over the past two years. The share has recently been revalued positively by the VectorVest program. This is a strong leading indicator of a move in the share price. Technically the share has been trading sideways but charting rising bottoms as shown by the trendline on the chart which suggests a breakout in the share price.

Summary: Historically of course, most of us subconsciously attribute any success enjoyed by BMY to the phenomenally successful Harry Potter series. VectorVest however have long appreciated that BMY is anything but a one trick pony: as publishers of Wisdens, Whos Who, Independent School Yearbooks and a raft of other publishing companies within the group, this is a highly resilient and investable company. The recent trading update provides further evidence of this, and combined with an excellent GRT of 22%, BMY is rated a buy at VectorVest in the run up to the results on May 22nd.

Dr David Paul

April 11th 2018

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European Financial Publishing Limited T/A VectorVest UK (VectorVest) is authorised and regulated by the Financial Conduct Authority under register number 543038. You should remember that the value of investments and the income derived therefrom may fall as well as rise and you may not get back the amount that you invest. Past performance is not a reliable guide to the future. This material is directed only at persons in the UK and is not an offer or invitation to buy or sell securities. If investors are in any doubt of the suitability of an investment given their individual circumstances, they are recommended to contact an investment manager or independent financial adviser who may be able to provide tailored advice. Opinions expressed whether in general or both on the performance of individual securities and in a wider economic context represent the views of VectorVest at the time of preparation. They are subject to change and should not be interpreted as investment advice. VectorVest and connected companies, clients, directors, employees and other associates, may have a position in any security, or related financial instrument, issued by a company or organisation mentioned on this site. European Financial Publishing Limited is a company incorporated in Scotland under Company Number SC357322 with its registered address at Exchange Tower, 19 Canning Street, Edinburgh EH3 8EH. Email: support@VectorVest.com

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