McGraw-Hill Financial Communications, a business division of McGraw-Hill Companies Inc. (MHP) in partnership with Standard & Poor’s, recently announced an alliance with Advisor Websites, a leading operator in the financial services industry, providing professional and compliant websites entirely for the financial services industry.
The move was not at all surprising in this frequently sprouting and immensely competitive environment as the companies are looking for more refined ways to approach their financial and investor communications.
The recent alliance will enhance the online substance and services of McGraw-Hill Financial Communications by customizing it according to the investors’ needs. Moreover, it will enrich the experience of the investor by providing synergistic lessons and charts, editorials emphasizing on related investment themes, investment ideas and calculators instructing them.
Further, it will also facilitate the company to approach a collection of over twenty diverse packages of synergistic online content in retirement and estate planning, mutual funds and ETFs.
The McGraw-Hill Financial Communications is a part of McGraw-Hill Education, which recently acquired Bookette Software, a privately held company producing software for the expansion, supervision and scoring of online course assessment. The financial terms of the deal were not disclosed.
Monterey, California based Bookette, which joined CTB/McGraw-Hill, provides smart-scoring software, which reviews scholar’s scripted answers in large number, thus simplifying evaluations and reducing the load of scoring while generating positive responses to the students. The company also offers high-end online courses for tutor training and test delivery.
The McGraw-Hill Education segment is one of the leading global educational publishers. The segment comprises of two operating groups: the School Education Group (SEG) serving the elementary and high school (elhi) markets; and the Higher Education, Professional and International (HPI) Group serving the college, professional, international, and adult education markets. The segment publishes textbooks for schools, colleges, and professional purposes worldwide.
During fiscal 2010, the company’s higher education and professional segment was buoyed by strong growth registered across digital products and services, and the increase in demand for online study tools (e.g. McGraw-Hill Connect series, McGraw-Hill Create) powered by higher enrollment in the U.S. academic institutions. However, quarterly results were dampened by the sales decline registered in December 2010 in the U.S.college as well as in international markets.
However, McGraw-Hill’s results could be negatively affected by lower volume of debt securities issued in the capital markets. The financial distress of the recent kind could either dent investor’s demand for debt securities or make issuers reluctant to issue such securities. In addition, increase in interest rates or credit spreads, may also adversely affect the general level of debt issuance.
Currently, we have a long-term ‘Neutral’ rating on McGraw-Hill, which competes with Pearson plc (PSO). Moreover, the company holds a Zacks #4 Rank, which translates into a short-term ‘Sell’ rating.
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