$601.00
$1589.00
bear $601.00
base $1032.00
bull $1589.00
margin of safety $600.00
market price* $1203.26
Graham Holdings, the former Washington Post Company, is a family-controlled holding company that owns a collection of unrelated businesses. Kaplan runs international pathway colleges in the United Kingdom, Australia and elsewhere, professional training and test prep, and the support contract for Purdue University Global. Seven local television stations include WDIV Detroit, KPRC Houston, WKMG Orlando, KSAT San Antonio and WJXT Jacksonville. A healthcare group is led by the CSI home-infusion pharmacy plus home health and hospice. Manufacturing includes Hoover treated wood, Dekko, Joyce/Dayton and Forney. There are car dealerships in the Washington, D.C. area and smaller holdings such as Clyde's restaurants, Slate and Foreign Policy. The company also owns about $1.08 billion of publicly traded stocks. How we measured earnings. We count the cash the businesses produce after taxes, after the spending needed to keep them running and after employee stock awards, measured before interest so that debt can be subtracted separately. On that basis the operating businesses produced about $210-230 million a year in 2022-2023 and $320-355 million in 2024-2025. We use the middle of those four years, about $275 million a year, as the starting level. Four years covers two full election cycles for the TV stations, where political advertising swells revenue in even years, and the company in its current form after the dealership purchases of 2019-2022 and CSI's growth. Earlier years describe a smaller, different company. Cash flow fell about 10% in 2025 from 2024; our starting level is below 2025, and the first half of 2026 (operating income up 18% to $141.5 million, with midterm political advertising still to come) gives no reason to start lower. Accounting judgements. Several large items in reported profit are not cash and are excluded: the steady accounting income from the heavily overfunded pension plan, including a $137 million gain in the second quarter of 2026 when the plan bought annuities for about 1,080 retirees, and gains and losses on the stock portfolio. Goodwill and other write-downs ($129 million in 2022, $99 million in 2023, $50 million in 2024) are also non-cash and are added back, but because the company has repeatedly written off acquisitions, the bear case charges for that habit. In 2024 and 2025 the healthcare unit booked $119 million and $55 million of charges to revalue a stake held by CSI's managers. We treated these as one-time: in February 2025 the company settled most of that stake for about $186 million in cash and $19 million of stock, only $8.4 million remained at the end of 2025, and the cash paid is already reflected in today's borrowings. Floor-plan loans that finance dealership vehicle inventory are treated as part of that inventory rather than corporate debt. We give no value to the pension surplus (prepaid pension cost of $2.77 billion at the end of 2025) because shareholders cannot take it out without punitive taxes; its benefit, that the company makes no pension contributions, is already in the cash flow. What the company owes. At June 30, 2026 debt was $900 million, mainly $500 million of 5.625% notes due December 2033, a $400 million revolving credit line maturing November 2030, and dealership real-estate and acquisition loans; about $190 million is classified as due within a year. Add about $24 million of finance leases and roughly $120 million for outside owners' shares of partly owned subsidiaries, less about $57 million of cash beyond operating needs: about $990 million in total. Against this, the $1.08 billion stock portfolio carries an unrealized gain of about $826 million; after an estimated 25% tax on that gain it is worth about $877 million, and investments in affiliates carry at $209 million. The investments roughly cover the debt. The debt carries ordinary market interest rates (about 5.7% on average at mid-2026), and 2025 cash interest of $63 million is small against the cash the businesses generate. Base case, about $1,032 per share. Cash flow holds at about $275 million a year for ten years with no growth credited. Healthcare expansion and new acquisitions are left out because they depend on future share gains and future deals; against them, the TV stations face continuing audience and fee erosion and Kaplan's international colleges face tighter student-visa rules in the United Kingdom and Australia. After year ten about $250 million a year persists, reflecting a shrinking TV group while Kaplan, the dealership franchises, healthcare and manufacturing carry on. Kaplan's Purdue Global agreement runs to 2048, and if Purdue ends it early it owes a fee of 125% of its prior-year revenue. The businesses are worth about $4.35 billion; add $1.09 billion of investments and subtract $0.99 billion owed for about $4.45 billion. Bear case, about $601 per share. A recession like 2008-2010 arrives in years two and three. In that episode U.S. new-vehicle sales fell by about a third, housing starts by roughly three-quarters, and local TV advertising dropped sharply; the dealerships, building-related manufacturing such as treated wood, and station advertising are the exposed pieces. Cash flow falls to $165 million (about 40% below the starting level) for two years, recovers only to $230 million, then drifts to $205 million by year ten as TV and international enrollment erode, with $175 million persisting afterward, close to what the smaller 2016-2020 company produced. We also assume the company keeps buying businesses and that about $50 million a year of that spending earns nothing, in line with the roughly $280 million of write-downs in 2022-2024. The stock portfolio is marked down 25% and affiliates by half. Businesses about $3.17 billion, less $0.37 billion lost on acquisitions, plus $0.78 billion of investments, less $0.99 billion owed: about $2.59 billion. Even at the trough, cash flow is more than two and a half times the interest bill. Bull case, about $1,589 per share. Cash flow starts near the 2024-2025 level, about $330 million, helped by 2026 political advertising, and grows 3% a year as CSI and the home-health business keep expanding (healthcare revenue rose 22% in the second quarter of 2026), reaching about $431 million in year ten and holding there. Businesses about $6.75 billion, plus $1.09 billion of investments, less $0.99 billion owed: about $6.85 billion. Our previous published figures were prepared on a different basis and are not comparable. What could make this wrong. The 2024-2025 jump may owe more to temporary factors than we think; if the 2022-2023 level of about $220 million is the true base, value is closer to $830 a share. The TV stations could decline faster, and the company could keep overpaying for acquisitions. Margin-of-safety price. We are moderately sure of the earnings level: the businesses are diverse, so no single failure sinks the company, but cash flow per share has ranged from about $17 to $80 over the past decade and the recent jump is only two years old. The worst plausible outcome is a deep recession arriving alongside tighter visa rules, faster TV decline and continued poor acquisitions. The balance sheet would survive that, because the stock portfolio roughly matches the debt and the notes run to 2033. The Graham family controls the board through its Class A shares; historically that has meant conservative finance and steady buybacks (about 2.5% of shares in the first half of 2026), but outside owners cannot force change. If we are wrong about the earnings level and about acquisitions, value sits nearer $600-830 a share. Over the holding period, the dividend is small ($7.52 a year) and most of the return comes from buybacks and slowly rising value. A price of $600 a share equates to about $2.6 billion for the company. After setting the investments against the debt, that values the operating businesses at about $2.5 billion, less than the roughly $2.9 billion that the smaller 2016-2020 company's cash flow (about $175 million a year) would be worth if it never grew. From there, if the base case is recognized within about three years, the base case implies about 20% a year, and the bear case value sits close to that price. The margin-of-safety price is $600.