Is Now the Time to Buy Pearson PLC (ADR) (PSO)?

Indeed, due to Pearson’s world-leading position in education, the company was able to raise North American education revenues by 2% during 2012, while aggregate revenues for the North American education market as a whole fell by 10%.

That said, like the rest of the publishing sector, Pearson PLC (ADR) (NYSE:PSO) is at risk from falling sales in the traditional book market.

However, the company is taking steps to reduce its reliance on traditional publishing and, at the end of 2012, 50% of all Pearson PLC (ADR) (NYSE:PSO)’s sales were digital-based.

In particular, digital subscriptions for the Financial Times grew 18% during 2012, which meant that, for the first time in its history, there were more copies of the newspaper sold online than sold in print. Furthermore, at the end of 2012, 17% of Penguin sales were in digital e-book form.

Nonetheless, despite these strong figures, Pearson’s management remains cautious about the future, and recently announced a restructuring plan aimed at reducing costs by around £100 million a year from 2014.

So, all in all, taking into account Pearson PLC (ADR) (NYSE:PSO)’s market-leading positions, restructuring plan, and current discount to sector peers, I feel now looks to be a good time to buy Pearson at 1,166p.

The article Is Now the Time to Buy Pearson? originally appeared on Fool.com and is written by Rupert Hargreaves.

Fool contributor Rupert Hargreaves has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned.

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