TAL Education Group (XRS)
By Paul Goodwin, Chief Analyst, Cabot Emerging Markets Investor
From Cabot Wealth Advisory 4/28/16 Sign up for Cabot Wealth Advisory—it’s free!
My stock pick today is TAL Education (XRS), a Chinese education stock that we covered in Cabot Top Ten Trader in early February. The stock made a nice move today after reporting earnings before the market opened this morning. XRS is now up from 49 to 59 since April 5, and with a nice tailwind from a well-received quarterly report, the stock should have more fuel in its tank.
And as an individual investor, you can buy it here today. But if you’d like to receive more information on the stock or additional momentum stocks featured in the advisory, consider taking a trial subscription to Cabot Top Ten Trader. The advisory has a great selection of momentum stocks ready to break out. Since the beginning of the year, we handed investors 67 winning trades and there are many more to come.
Click here for details.
By Timothy Lutts, Chief Analyst, Cabot Stock of the Month
From Cabot Wealth Advisory 4/25/16 Sign up for Cabot Wealth Advisory—it’s free!
TAL Education (XRS) is one of the largest private educators in China, offering a variety of services for students from pre-school through high school. Using three formats—small classes, personalized tutoring and online courses—it teaches core topics like math, English, Chinese, physics, chemistry and biology.
Unlike Amazon and Tesla, TAL Education is profitable now, and growing at a good clip; revenues were up 38% in 2015, while earnings were up 22%. This year, earnings are expected to grow 27% (the first-quarter report is due Thursday, April 28).
And, of course, very few investors in the U.S. have ever heard of the company. Thus, at the least, I think the company will do well as it grows, and the stock will do well, too. But just imagine what might happen as more and more U.S. investors become aware of the company and slowly upgrade their opinion of Chinese education? And, thinking creatively, what might happen if the company enters the U.S. market, to begin competing in our overpriced, underperforming elementary and high school systems?
I can’t predict what’s going to happen, but it’s pretty clear from watching the chart that investors’ perceptions are already improving.
And, as I’ve said many times, trends tend to go further and last longer than most people expect.
So, you could take a flyer and jump on XRS right now (just be careful to use the proper symbol, not TAL). But a better idea would be to become a regular reader of Paul Goodwin’s Cabot Emerging Markets Investor. Paul recommended XRS to his readers back in December, just as it broke out from its long base at 39, and those readers are now sitting on solid profits, while expecting the stock to climb much higher. Click here for more information.
From Cabot Wealth Advisory 8/21/14 Sign up for Cabot Wealth Advisory—it's free!
My stock pick this week is a Chinese education stock I recommended for my subscribers back in June. The company is TAL Education Group (XRS), a company that specializes in K-12 after-school tutoring services, including small group, one-on-one and online courses. The company offers classes in math and science and English, with a division for teaching young learners (age three to eight) and another for personalized premium educational services.
The company operates in 16 key Chinese cities, with 274 learning centers, 90 of which are devoted to personalized premium services. Plus, TAL operates the largest online education community in China.
The company has $270 million in cash on hand and no debt. Its Q2 earnings report showed a 69% jump in earnings, not as good as the four consecutive quarters of triple-digit earnings growth in the previous year, but still quite strong. And revenue growth was a robust 45%.
XRS floundered around after its October 2010 IPO at 10, finally putting in a bottom at 7 in September 2012. Since then the stock has been in a strong rally, with a modest four-month correction from January through May that helped to shake out weak hands and reset its buyability. The stock broke out in June and again in late July. I like it.
|TAL Education Group (XRS)
Danling SOHO, 12th Floor
Beijing, 100080 China
86 10 5292 6669
|Index Membership: N/A
Industry: Education & Training Services
Full Time Employees: 6,375
4/25/16 TAL Education (XRS): Profitable and growing
8/21/14 TAL Education Group (XRS): Specializes in tutoring services