Portfolio Positions Heading in to 2026

Goodheart-Willcox is a publisher of career, technical, health and physical education textbooks. Over the past decade it has been growing its capital light e-book division very quickly, so that now the business requires minimal capex and consistently throws off cash. In fiscal 2025, it generated $23M in free cash flow. On a market cap of $193M, that is a 12% cash yield. Historically it has distributed 45% of free cash flow as dividends while the rest of the cash builds up on the balance sheet. Occasionally once cash is too high they announce a special dividend (last in 2021) or tender offer (last tender was April 2019 at a 50% premium to the stock price).