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Show am , . ...-..W.. r- ,. , TEXTBOOK PUBLISHERS ON THE UPTREND The college, professional, and vocational voca-tional sectors of the book publishing industry in-dustry are expected to continue setting new records both in sales and new income in-come over the next several years. These groups generate almost one-half of the total revenues of U.S. book publishers, and historically they have managed to grow even during recessions. reces-sions. In the past few years, the publishers of school and professional books have met surprisingly little resistance to the increasing of prices to counteract inflation. infla-tion. But unit sales of paperbacks for the mass market and for the general trade have for the first time in 30 years weakened notably owing to buyer resistance to rising prices. Sales of adult trade hardcovers, religious volumes, and mail order books have declined for similar reasons. The Research Department of Bab-son's Bab-son's Reports feels that book publishers not well situated in textbooks and professional pro-fessional books, or not well diversified in other allied andor more recession-proof recession-proof product lines, could succumb to further acquisiton moves by non-publishing non-publishing as well as other publishing companies. With few exceptions, the securities of book publishers performed well in 1979, with prospects favor still further improvement in 1980. CHARACTERISTICS OK INSTRUCTION l. M VKkETS Educational spending per pupil in both elementaryhigh schools and colleges col-leges is iiighcr, and this should continue into the 1980 s as the return to basics accelerates ac-celerates Mud, of the money formerly allocated to teacher salaries is now spent for more hardcover textbooks as well as for supplementary instructional materials. Professional books are also increasingly increas-ingly necessary to keep up with developments in the various technical and vocational fields. Prices of these can be well maintained and press runs geared to marketing programs. And the proliferation of the.two-year community communi-ty colleges, vocational and technical schools, and continuing adult education programs has likewise provided more business for textbook publishers. The growth in these markets persists despite a temporary slowdown in student stu-dent enrollments. A resurgence in school population anticipated for the mid-1980's should further enhance overall propsects for the publishers of instructional books and materials. h n hi: (.now i ii M I IS I K S KWOK Wil.h The educational publishers intend to be ready w ith new and improved series of texts and other learning materials for what could be a boom in sales to the elementary schools w hen a new generation genera-tion of school-age children is slated to start school in th mid-1980's. Secondary school enrollments are also expected to show improvement. Total book industry sales amounted to some $f) 2 billion in 1979, and industry in-dustry experts are projecting a flood but more modest gain in 1980 to follow the estimated 8-9 percent rate of expansion expan-sion achieved last year. By 1985, the forecast is for $7.8 billion in sales. Together with joint-publishing in foreign concerns, U.S. companies are looking for an improvement of 10-15 percent in sales by 1985. Consequently, the industry has become very attractive attrac-tive to both private and public investors, in-vestors, as already reflected in the price of their securities. INVESTMENT ADVICE Babson's Reports regularly supervises super-vises four of the major book publishers. These arc Addison-Wcsley Publishing, Houghton Mifflin, MacMillan, and McGraw-Hill. We have recommended purchase of some of these publishers in the past at lower prices. Our latest buy recommendation was McGraw-Hill, w hich has now exceeded our buy limit. In the future, additional purchase advices ad-vices for book publishers (especially those doing a sizeable business in educational and professional texts) are expected to be made. For the present, we are maintaining hold positions on the securities of the above-mentioned companies. |