EDUC
The last two days I have been buying some EDUC, the recent 8k on the stock has made me a lot more positive on the stock. still a small position.
The concerns for me were really twofold with this stock:
1) They cut or eliminate the divy. That is still a concern.
2) But the bigger concern was them diluting a lot at these prices, and they said they are not interested in doing that at this time. which basically means the price is way too low to raise capital that way which makes me like management a lot more by the way. Also in that 8k they paid the CEO back which leads me to the story of improving cash flow situation as well.
Now these are not reasons to like EDUC, but reason 2 is what was stopping me from buying a tiny position here. and that reason has disappeared. here is why I like it though.
1) EDUC Earned .31 in q3, and I expect similar results in q4 as well.
2) EDUC should has improving pre tax margins in the next fy, with increasing sales next fy year, I expect then to get to perhaps close to the lower end of the long-term range of slightly under, the longer-term range is 8-10% pre tax of revs, so if revs jump higher in fy 18 and even use 7%. earnings could be really significant in fy 2018 if they deliver improving pre tax margins like I think they can.
Conclusion: I like EDUC, it has a bit of swing and miss. Obviously growth is not gonna continue as rapid of rate, but I still expect them to grow and grow decently going foward, this is all about a return to historical pre tax margins, if we return there, like they believe they can in fy 2018, the stock could easily double in my opinion. I plan to keep my position very tiny right now, but as always will add on weakness. ALl is just my opinion, and I could always be wrong though.
