On November 11, 2020, CNBC.com published an article by Fred Imbert and
Maggie Fitzgerald titled “S&P 500 and Nasdaq rise as investors buy tech shares beaten up this week, Dow closes flat” (https://www.cnbc.com/2020/11/10/stock-market-futures-open-to-close-news.html).
The article shares that “the S&P 500 and Nasdaq Composite rose on Wednesday as tech shares recovered some of their losses from earlier in the week at the expense of names who would benefit from an economic recovery. The broader-market index closed 0.8% higher at 3,572.66 and the Nasdaq jumped 2% to 11,786.43.”
Imbert and Fitzgerald detail that “Apple gained 3%. Netflix climbed 2.2%. Facebook (NASDAQ: FB) and Amazon (NASDAQ: AMZN) rose 1.5% and 3.4%, respectively. Alphabet (NASDAQ: GOOG) closed 0.6% higher, and Microsoft (NASDAQ: MSFT) was up by 2.6%…Wednesday’s moves came after strong back-to-back strong sessions for the Dow that were sparked by Pfizer (NYSE: PFE) and BioNTech’s announcement about their more than 90% effective Covid-19 vaccine.”
The article cites Inigo Fraser-Jenkins, Bernstein’s portfolio strategy co-head, as stating that “an abrupt macro positive shock such as we saw this week can lift all value stocks for a time…However, we think that the outlook for the next year has to be more nuanced.”
Imbert goes on to reference Fraser-Jenkins once more in the similarly related update “Tech shares rise in the premarket, trying to claw back some of this week’s losses.” Imbert again quotes Fraser-Jenkins, who analyzes that “real yields are likely to be held low and there is still a greater longevity of growth for high Growth companies, thus we think it is right to remain overweight Growth companies where it is reasonable to believe their growth can be sustained.”
In light of the articles, let us turn to another high growth area which has been benefitting tremendously from the pandemic: the Ed-Tech sector. 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. CHNUF made US$978,466 net income in Q2 2020 (earnings per share $0.02).
China Education Resources Inc. (CHNUF) current price is $0.03 per share (P/S Ratio of 0.16, P/E Ratio of 1.6)
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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