In another record year for the stock market overall, the Publishers Weekly Stock Index posted strong gains, but with a major caveat. Four of the 10 companies listed on the PWSI had double-digit increases in their stock prices in 2017, but the remaining six had declines, a couple of them significant.
Educational Development Corp. had the largest percentage increase among the PWSI stocks, with its share price up more than 83%. The company’s stock price had a bit of an up-and-down year after shipping and fulfillment problems limited sales growth in the final quarter of 2016. But by mid-2017, EDC had doubled its shipping capacity, and unaudited results for the period ended Nov. 30, 2017, showed third-quarter revenue was 26% higher than in the comparable period in 2016.
Amazon’s stock price jumped 56.1% in the year and its share price grew by $419.60. With overall online sales during the holidays at record levels—and some analysts estimating that Amazon accounts for 50% of them—investors appear confident the sky is the limit for the company.
Excluding Amazon, the PWSI was down 3.3% in 2017. John Wiley, which has been the most aggressive among educational publishers in reinventing its business, posted a solid 20.6% increase in its share price. But the stock prices of two other textbook publishers fell in the year. Pearson, which eliminated around 3,000 jobs in 2016, said in 2017 that it would cut another 3,000 positions as part of a restructuring effort to transform the company into “a leaner, more agile business.” Its stock price fell 1.7% last year. Houghton Mifflin Harcourt’s share price dropped 14.3%; it too is working to reorganize in response to changes in the educational marketplace.
LSC Communications had the largest decline in its stock price last year, but the company that had the lowest stock price among the PWSI members was Barnes Noble; it dropped nearly 40% in the year, to $6.70 per share. Investors are clearly growing impatient with the retailer’s inability to increase sales even as it cuts costs.
Stock Watch 2017Company Dec. 30, 2016 Dec. 29, 2017 Change Educational Dev. Corp. 9.95 18.24 83.3% Amazon 749.87 1,169.47 56.1% New Corp. 11.80 16.60 40.1% John Wiley 54.50 65.75 20.6% Pearson 9.99 9.82 -1.7% CBS 63.62 59.00 -7.3% Houghton Mifflin Harcourt 10.85 9.30 -14.3% Scholastic 47.49 40.11 -15.5% Barnes Noble 11.15 6.70 -39.9% LSC 29.68 15.15 -48.9% PW Stock Index 998.90 1,410.4 41.4% Dow Jones Average 19,762.60 24,719.22 25.1%
Source: Publishers Weekly