McGraw-Hill Companies (MHP)

The company's best performing unit--Financial Services--stands to benefit from strong trends of growing capital markets, enrollment rates, and general demand for information.

In early 2011, MHP introduced its mConnect platform: "an open-standard mobile learning platform designed to bridge the skills gap in emerging markets." That company says that initial pilots will start in India and then spread to other emerging markets. The platform is said to be focused on the cell phone as the learning device. MHP's involvement in mobile education further shows how the company is keeping pace with the advances in technology.

In October 2010, McGraw-Hill announced the launch of its Create platform. The platform gives teachers control of the customization of higher education classroom content. Using Create, teachers can create their own e-books and printed texts by selecting content from a vast library of resources – and receive a digital proof in under an hour.

The Creative initiative allows MHP to enter the e-book market in some sense. Instead of having to produce expensive hard copies of textbooks, professors can now customize them electronically. The growing popularity of e-readers and MHP's Creative platform could complement each other well.

After 80 years, McGraw-Hill Companies sold BusinessWeek magazine, which since the economic downturn was struggling severely. The company sold the magazine to Bloomberg for around $5 million. In 2008, the magazine was losing $800,000 a week due to lower demand. Now that the company has divested away from the magazine, it will now focus its resources on its other profitable segments.

McGraw-Hill has market dominance and significant barriers to entry in its two largest segments, as well as trusted brand names in its Information & Media segment.

Particularly in its financial services segment, McGraw-Hill is poised for strong bottom line growth and expanded market share.