If You’re Patient, This Warren Buffett-Linked Stock Is a Bullish Price Surprise Worth Owning

In Monday trading, a poorly-followed $1,000+ stock was one of the top 100 bullish surprises. Graham Holdings Company (GHC) gained 3.0% on the day, with a standard deviation of 2.34, indicating the share price moved 2.34 standard deviations relative to its historical volatility. 

The Barchart Help section for Standard Deviation states: “According to the normal distribution bell curve, a stock will show a move of less than one standard deviation (plus or minus) about two-thirds of the time, a move of less than two standard deviations 95% of the time, and a move of less than three standard deviations 99% of the time.”

So, yesterday’s 3.0% move by GHC was relatively unusual. The volume of 25,800 was about 1.35 times the 30-day average. It was also the highest daily total since April 8 and March 20, respectively. 

Graham Holdings, as its name suggests, is a diversified holding company. Yesterday, it announced the sale of Kaplan Languages Group (KLG) -- a unit of Kaplan International, its largest revenue generator -- to Inspirit Capital, an investment firm specializing in business carve-outs.  

While it released no terms, Kaplan CEO David Jones said it made the sale so that the higher education service provider could focus on its schools for higher education, finance, and accounting professionals.

When fewer than 20,000 shares trade daily, or about $22.3 million, when the volume skips up, the price usually follows. The problem is that it doesn’t happen often. 

If you’re patient, you can make reasonable returns on Graham Holdings over the long haul. Here’s why. 

The Graham in Graham Holdings

About the only investors who know about Graham Holdings are those who are also familiar with Warren Buffett and Berkshire Hathaway (BRK.B)(BRK.A). Buffett and longtime Washington Post owner Katherine Graham were good friends, a friendship that's been covered significantly over the years. 

In 1963, after the death of her husband Philip Graham, who ran the Post, Katherine Graham became president of the company. She stepped down as CEO in 1991. Her son Don was CEO from 1991 until selling the paper to Jeff Bezos in 2013. 

On Nov. 13, 2013, after Don Graham had sold the Post and other assets of the newspaper division, the remaining assets were renamed as Graham Holdings Company. Graham remained CEO until November 2015, serving as Chairman through May 2023. He’s now Chairman Emeritus. 

The board itself is composed of some exceptional business professionals with ties to both the Graham family and Warren Buffett. The directors include Tom Gaynor, CEO of Markel (MKL), Chris Davis, Chairman of Davis Selected Advisors LP, an independent investment management firm, and former General Motors (GM) CEO Richard Wagoner Jr.  

If you believe in the idea of six degrees of separation, GHC ought to be right up your alley. 

The Many Moving Parts

Kaplan International is Graham Holdings’ largest revenue generator. In Q4 2025, it accounted for 33% of the company’s $1.25 billion in revenue and 52% of its $47.6 million in operating income.

Remember, this is a stock you must be patient with. Operating income varies widely from quarter to quarter, depending on events and transactions that occur in each period. 

For example, in the fourth quarter, it acquired a Honda dealership in Woodbridge, Virginia. However, it also closed a Jeep dealership in the DMV (Washington D.C., Maryland, Virginia) area, taking a $10.1 million impairment charge. Its Automotive segment accounted for 22% of the holding company’s revenue. 

Its six segments all generated at least $100 million in revenue in the fourth quarter, with most of the growth from Healthcare and Manufacturing, which grew sales by 28% and 24%, respectively. The two accounted for 28% of Graham Holdings’ overall revenue in the quarter. Healthcare’s operating income was $31.6 million, an operating margin of 13.7%. 

Meanwhile, its Television Broadcasting segment, which saw revenue drop by 32% in the quarter to $110.5 million due primarily to a big drop in political advertising, still posted an operating margin of 30%, more than double that of healthcare. 

It even owns Foreign Policy magazine, a title that is very relevant given the current war in Iran. 

Valuing the Many Parts

No question, valuing Graham Holdings isn’t easy. In fact, it’s a dog’s breakfast, but it operates businesses in some interesting sectors. 

You often can’t go wrong in healthcare. Its CSI Pharmacy specialty home infusion business is licensed in all 50 states. Graham Healthcare Group provides home health, palliative and hospice care services to approximately 94,000 patients in Michigan, Illinois, Pennsylvania, Kansas, Missouri, Ohio, and Florida. And there are several other healthcare-related businesses. 

It even has an equity portfolio of $1.08 billion as of Dec. 31, 2025. Its investments consist of six stocks: Alphabet (GOOG), Berkshire Hathaway (both Class A and Class B), Cable One (CABO), Markel, and PubMatic (PUBM), a provider of programmatic advertising software. These are the easiest to value. 

Are you late to the party? I don't believe you are. 

In August 2025, Barron’s contributor Andrew Bary said the stock looked cheap. Its shares were trading at $920.42. They’re up 27% since then.

“Graham also has an overfunded pension fund that is a valuable and underappreciated asset, even if it isn’t easy to monetize. Sum up the parts, and the shares of the low-profile company have an estimated asset value of more than $1,500, far more than their current price of $950,” Bary wrote at the time.   

As of Dec. 31, its defined benefit pension plans had a surplus of $2.77 billion, up 10.4% from $2.51 billion in 2024. They paid out $41.4 million while growing by more than 10 times that amount. Even with total benefit obligations of $640 million, the assets cover them by more than fivefold. The surplus is approximately $645 per share. 

If you back out that $645, you’re paying $525 for $66.25 in earnings per share in 2026. That’s less than eight times. 

If you’re patient, you should make money with Graham Holdings over the long haul.