Based on the aggregated intelligence of 140,000-plus investors participating in Motley Fool CAPS, the Fool's free investing community, The McGraw-Hill Companies (NYSE: MHP ) , parent of embattled ratings agency Standard & Poor's, has received a distressing two-star ranking.
With that in mind, let's take a closer look at McGraw-Hill's business and see what CAPS investors are saying about the stock right now.
McGraw-Hill facts
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Headquarters (Founded)
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New York City (1888)
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Market Cap
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$8.59 billion
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Industry
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Media
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Business Segments
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Education, Financial Services, Information & Media
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Trailing-12-Month Revenue
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$6.08 billion
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Management
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CEO Harold McGraw, III (since 1998)
CFO Robert Bahash (since 1988)
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Revenue and Net Income Growth (Over Past Year)
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(8.6%) and (17.3%)
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Cash / Debt
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$556 million / $1.29 billion
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1-Year Return
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29.8%
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Competitors
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Moody's (NYSE: MCO )
Pearson (NYSE: PSO )
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CAPS Members Bearish on MHP Also Bearish on
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Bank of America (NYSE: BAC )
AIG (NYSE: AIG )
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CAPS Members Bullish on MHP Also Bullish on
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General Electric (NYSE: GE )
Johnson & Johnson (NYSE: JNJ )
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Sources: Capital IQ (a division of Standard & Poor's) and Motley Fool CAPS.
On CAPS, 8.5% of the 496 members who have rated McGraw-Hill believe the stock will underperform the S&P 500 going forward. These bears include All-Star jaygatsby49, who is ranked in the top 2% of our community, and dcrednek.
Just last month, jaygatsby49 highlighted the stock's risk/reward profile as anything but rewarding: "[McGraw-Hill] does not have a lot of upside at the current price, but there is a MASSIVE downside if S&P are found liable for the AAA bond rating for SIVs and other asset backed securities."
In a pitch from later in the month, dcrednek elaborates on the scandalous situation:
McGraw-Hill, parent company of Standard & Poor's, is going to have their hands full getting to the bottom of the current ratings scandal. Looks like Moody's may have some problems and who would imagine that during the earlier part of this decade S&P could be competitive without adopting the same dumb (and possibly fraudulent) rating criteria in order to win business. With all of the uncertainty surrounding S&P I'll play it safe and give its parent a big, fat UNDERPERFORM until further notice.
What do you think about McGraw-Hill, or any other stock for that matter? Make your voice heard on Motley Fool CAPS today. The CAPS community is waiting to hear your opinions. CAPS is 100% free, so get started!
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