New Oriental Education & Technology Group
) reached a 52-week high of $32.00 on Monday, Dec 31, 2013, due
to the solid fiscal second quarter 2014 guidance provided by the
company. The second quarter results are slated to be announced on
Jan 21. The closing price of the education company on Dec 31,
2013, was $31.50, representing a solid year-to-date return of
Share Price Drivers
Oriental Education offers private educational services in China.
Share price of this educational service provider was driven by
the company's expectation of strong enrollment in the upcoming
quarter. At its first quarter conference call, the company
revealed that demand has been strong through September and first
half of October 2013. In fact, the company recorded an 8.3%
increase in enrollment for the six week period.
The company expects strong enrollment growth in the upcoming
three quarters on the back of higher K-12 after school tutoring
enrollment. Increase in K-12 after school tutoring enrollment can
be attributed to the final examinations scheduled at the end of
autumn and spring semesters and for the Gaokao and the Zhongkao
examinations in early June.
The company expects net revenue in the second quarter of fiscal
2014 to increase in the range of 22% to 27% and be within the
range of $202.4 million to $210.7 million. The Zacks Consensus
estimate is $205 million for the quarter. In addition, the
company intends to increase its research and development
(R&D) investments in order to improve its teaching quality
and course materials.
Another education company,
Universal Technical Institute, Inc.
) also reported better than expected new enrollment in its
fiscal fourth quarter of 2013 due to the recovery in the
New Oriental Education & Technology Group carries a Zacks
Rank #3 (Hold).
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Some better-ranked stocks in the education sector include
Xueda Education Group
Apollo Education Group, Inc.
). Both the companies hold Zacks a Rank #2 (Buy).