On Jul 04, Zacks Investment Research upgraded
New Oriental Education & Technology Group
) to a Zacks Rank #1 (Strong Buy) on the back of a strong fourth
quarter and fiscal 2013 outlook.
ATA INC-ADR (ATAI): Free Stock Analysis
CAPELLA EDUCATN (CPLA): Free Stock Analysis
NEW ORIENTAL ED (EDU): Free Stock Analysis
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Why the Upgrade?
New Oriental has a bright outlook for the fourth quarter and
fiscal 2013. New Oriental expects revenues to increase in the
range of 20% to 25% year over year in the fourth quarter of 2013.
At the third quarter 2013 earnings conference call, the
management revealed encouraging enrollment data for the first six
weeks of the fourth quarter. They said enrollment increased 14%
year over year in the first six weeks of fourth quarter 2013. The
cash receipts in advance for enrollments for the same time period
At the Deutsche Bank Depositary Receipts Virtual Investor
Conference call held on Jun 24, New Oriental provided outlook for
fiscal 2013 .The company expects enrollment to grow 6% to 8% for
fiscal 2013. Total revenue is expected to grow in the range of
25% to 30% for the same period.
New Oriental also provided encouraging outlook for fiscal 2014.
For fiscal 2014, management expects enrollment to increase 6% to
8% while revenues are likely to be up 20% to 25%. Prices are
likely to increase around 12% whereas margins are expected to
expand over 15% to 16%.
New Oriental recently completed a share repurchase program worth
$50 million. Given its strong cash position and if approved by
the board, management expects to pay a dividend of 30 cents per
share or higher after the fourth quarter (ended May 31) results
Other Stocks to Consider
Stocks in the education industry that are currently performing
well and have a bright outlook include
Grand Canyon Education, Inc.
Capella Education Co.
). ATA carries a Zacks Rank #1 (Strong Buy) while Grand Canyon
Education and Capella Education both carry a Zacks Rank #2