The Graham family appears to be taking investment cues from Warren Buffett.
As the Washington Post Co. pivots away from its one-time core newspaper property, some industry observers believe the company is trying to refashion itself into a diversified mini-conglomerate a la Buffett’s Berkshire Hathaway.
Buffett is the Washington Post Co.’s longest and most loyal outside shareholder. Don Graham, the head of its controlling family, is said to regard Buffett with something close to awe.
“It is almost like they are trying to be a mini-Bershire Hathaway with their recent two small acquisitions that don’t fit with the existing media and education properties,” said analyst Craig Huber, at Greenwich, Conn.-based Huber Research.
Without the storied paper, which Jeff Bezos agreed to buy for $250 million in cash, investors are waiting for Graham & Co. to signal a strategy for the company, which could also include selling off more pieces.
The company — which will be renamed following the sale of the paper — is currently a hodgepodge of interests, including the Kaplan education unit, six broadcast stations, cable-TV provider Cable One, a hospice company and even a maker of industrial equipment.
“It is a conundrum,” said Ken Doctor, an analyst who follows the newspaper industry. “It is a company that was assembled piecemeal over the years and many of the acquisitions were used to fund the Post.”
Last month, the Washington Post Co. purchased Forney Corp., which makes oil and gas burners for electric utilities, for an undisclosed price from United Technologies.
Chairman Donald Graham said it was a “small acquisition that fits with our decentralized operating philosophy.”
In October 2012, it purchased Celtic Healthcare, a hospice company with revenue of $43 million, with Graham saying it was “part of the company’s ongoing strategy of investing in companies with demonstrated earnings potential and strong management teams attracted to our long-term horizon.”
That’s the kind of acquisition language that could have been written by Buffett, who controls 27.9 percent of the Washington Post’s Class B stock.
The company’s common stock closed up 4.3 percent yesterday to $593, a five-year high, on the news that billionaire Amazon founder Bezos is paying cash for the flagship paper.
The tech titan is also buying other Washington-area publications, including the Express paper, Fairfax County Times and the Gazette papers.
Analyst Huber doesn’t think that the Washington Post Co. will sell its broadcast, cable or education units.
But he was surprised that the company’s two small media properties — digital news site Slate, which Microsoft sold to the Washington Post, and Foreign Affairs magazine — were not included as part of the deal.
“I don’t know why Slate and Foreign Affairs were not included in the sale to Bezos,” said Huber. “I assume it is because they are not losing money like the Washington Post and have a better future in management’s eyes.”
Jacob Weisberg, the head of Slate, told The Post: “Our business is doing really well. It wasn’t for sale.”
He declined to disclose earnings or revenues, but added, “Don [Graham] indicated he wanted to keep Slate. Our business is working. We’re very content.”