GHC

Graham Holdings is a diversified holding company — education (Kaplan), broadcasting, healthcare, manufacturing, automotive dealerships, and other operating businesses, plus a sizable marketable-securities and investment portfolio. The operating business is doing fine: FY2025 revenue grew 2.5% to $4.91B and, importantly, operating income rose 9.0% to $235M, showing the underlying segments are improving. The conglomerate carries a conservative balance sheet — $4.79B equity (up 12.6%) against $3.53B liabilities (0.74x), with modest debt ($706M long-term).

The headline earnings volatility is the thing to understand. Net income fell 59.7% to $292M and diluted EPS dropped 59.3% to $66.47, but that is almost entirely an artifact of how Graham marks its investment portfolio through the income statement: FY2024's $725M net income was inflated by large unrealized investment gains, and the FY2025 figure reflects a tougher mark-to-market comparison rather than operating deterioration (operating income, by contrast, rose). The five-year net-income series — $352M, $67.1M, $205M, $725M, $292M — bounces precisely because of these non-operating swings, so the reported 17.2x P/E and 6.0% net margin should be read with that in mind.