November 18, 2020, CNBC.com published an article by Vicky McKeever titled “Dow Jones could hit the 40,000-point level next year, analyst says.”
In it, McKeever states, “The Dow Jones Industrial Average stock index has the potential to reach the 40,000-point mark in 2021, according to Patrick Spencer, the vice chair of equities at investment bank Baird.”
“Spencer explained…that the index contained more value than growth stocks, and expects the former to outperform while the latter stabilizes.”
McKeever cites Spencer as stating that: “there’s still a lot of despondency, a lot of reticence with regard to going into the market and they are still pretty unloved generally, equities…We talk about maybe 40,000 level on the Dow there next year because of the make-up of that index which is more value than growth.”
McKeever writes that “The Dow Jones closed at 29,783 points on Tuesday and has risen by over 4% so far this year despite the coronavirus crisis. Stocks have seen a strong rally in the last few weeks on vaccine hopes, and Spencer’s call would represent a climb of nearly 35% from current levels.
Spencer argued that the Dow Jones rally still had further to run next year. He pointed out that there was $6.5 trillion sitting in money market accounts…He also highlighted that despite a recent record investment in exchange-traded funds…there had been more people selling out of ETFs this year than money going in.
With a lot of people ‘hiding in cash,’ Spencer said equities remained out of favor and therefore believed markets would surprise investors next year to the upside.”
In light of McKeever’s article, let us turn to one tech area, the Ed-Tech sector, that has benefitted during the pandemic, and in particular consider one value stock: China Education Resources Inc. (“CHNUF”). CHNUF is perfectly poised to cater towards the intensified e-learning market demands which have arisen as a direct result of the COVID-19 pandemic. Based in Vancouver, Canada, CHNUF is a publicly-listed ed-tech company (TSX-V – CHN and OTCQB – CHNUF) with leading technology in intelligent system and contents. It provides online/offline learning, training courses, and social media for teachers, students and education professionals; these are all increasingly integral aspects of education in the contemporary era. CHNUF has 2 million kindergarten through twelfth-grade teachers registered through its web portal in China.
CHNUF’s online education platform and services provide a vertically blended learning, teaching, research and management system for a student-teacher-school-parent community. CHNUF’s products and services facilitate a significantly more efficient and enriched virtual educational experience for both teachers and students, most especially during a time when online education has become the backbone of many societies around the world. In combination with the circumstances and demands which have arisen as a result of the COVID-19 pandemic, we believe that China Education Resources’ numerous attributes will provide the Company with great long-term revenue potential.
CHNUF has 47,364,983 common shares outstanding. CHNUF generated US$9,390,402 revenue in 2019. CHNUF made US$978,466 net income in Q2 2020 (earnings per share $0.02).
China Education Resources Inc. (CHNUF) current price is $0.04 per share (P/S Ratio of 0.20, P/E Ratio of 2.0)
In comparison with CHNUF, the ratios of some larger education companies or organizations are as follows: *
|1. Chegg, Inc. (CHGG)||P/S Ratio of 22||P/E Ratio of 5,375|
|2. New Oriental Education & Technology Group Inc. (EDU)||P/S Ratio of 6.8||P/E Ratio of 58|
|3. GSX Techedu Inc. (GSX)||P/S Ratio of 84||P/E Ratio of 700|
|4. TAL Education Group (TAL)||P/S Ratio of 13||P/E Ratio N/A|
|5. Genius Brands International, Inc. (GNUS)||P/S Ratio of 42||P/E Ratio N/A|
|6. Microsoft Corporation (MSFT)||P/S Ratio of 11||P/E Ratio of 35|
|7. NVIDIA Corporation (NVDA)||P/S Ratio of 27||P/E Ratio of 107|
|8. Zoom Video Communications, Inc. (ZM)||P/S Ratio of 232||P/E Ratio of 654|
|9. DocuSign, Inc. (DOCU)||P/S Ratio of 40||P/E Ratio N/A|
|10. Slack Technologies, Inc. (WORK)||P/S Ratio of 19||P/E Ratio N/A|
(*Calculations are based on figures from Yahoo Finance as of Sept. 23, 2020)
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