On January 27, 2021, cnbc.com published an article by Yun Li titled “GameStop mania explained: How the Reddit retail trading crowd ran over Wall Street pros.”
Li writes that “Wall Street has been watching GameStop (GME) in awe as a band of Reddit-obsessed retail investors managed to push the stock up 1,500% in two weeks, squeezing out short selling hedge funds.
A wave of at-home traders found each other on the red-hot ‘wallstreetbets’ Reddit chat room, whose members have ballooned to over 3 million. By motivating each other to keep piling into shares and call options, they coordinated a monstrous short squeeze in the brick-and-mortar video game retailer.
‘Retail investors with the help of technology acting as a union in attacking is a new phenomenon,’ said Jim Paulsen, chief investment strategist at the Leuthold Group. ‘You combine the power of technology, which allows you through Reddit postings to magnify your individual impact, with some use of leverage and very targeted bets, they can have a significant influence, particularly on areas of vulnerability because of the short positions,’ Paulsen said.
Many enthusiastic Reddit users have been posting screenshots of their brokerage accounts, some of which touting astronomical returns north of 1,000% in a handful of days…‘This is gaining cult-like status,’ said Quincy Krosby, chief investment strategist at Prudential Financial. ’It is a pack of traders and the pack is gaining momentum. The retail crowd is not just taking over the shorts and it’s taking over the headlines.’
In short, a new phenomenon has emerged: a slew of retail traders are using online social media platforms to become powerful new voices of the stock market.
In light of this article, both retail traders and Wall Street investors alike should consider the value stock of the EdTech sector; EdTech is an extremely high growth tech area which has been benefitting tremendously from the pandemic. In particular, let us consider the specific Ed-Tech value stock that is 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. Nine months ended September 30, 2020, CHNUF made US$2,534,774 gross profit (earnings per share $0.01).
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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