Stock (Symbol) |
TAL Education (XRS) |
Stock Price |
$50 |
Sector |
| Food & Necessities |
Data is as of |
| February 2, 2016 |
Expected to Report |
| Apr 26 – May 3 |
Company Description |
 TAL Education Group is a holding company for a group of companies engaged in provision of after-school tutoring programs for primary and secondary school students in the People’s Republic of China (the PRC). The Company is a K-12 after-school tutoring services provider in the PRC. The Company offers tutoring services to K-12 students covering core academic subjects, including mathematics, English, Chinese, physics, chemistry and biology , history, political science and geography as well as preschool classes. It delivers its tutoring services through small classes, personalized premium services (such as one-on-one tutoring) and online course offerings. As of February 28, 2013, it network consisted of 255 learning centers and 237 service centers in 15 cities throughout China, with most of these learning centers and service centers located in Beijing and Shanghai, as well as its online platform. Source: Thomson Financial |
Sharek’s Take |
 TAL Education (XRS) is a Chinese stock that’s not yielding to the overpowering stock market decline. TAL, which stands for Tomorrow Advancing Life, provides after-school tutoring for in China for children between kindergarten and the 12th grade through a combination of small classes, 1-on-1 tutoring, and online courses. The company has 301 learning centers, including 227 small class centers and 74 one-on-one centers with around 40% located in Beijing. Kids in China have a college admission rate for a 4-year degree college of just 41% compared to 64% here in the states. And just 9% of students gain admission into top universities compared to 28% in the US. So Education, and top grades, are of importance in China. Last qtr TAL had student enrolment growth of a whopping 57% as sales grew 43% (49% in RMB). Online courses grew 54%. But profits rose just 6% as the company spends more on administration due to expansion into five new cities during the qtr. Qtrly profit growth is expected to be 9%, 14%, -27% and 26% the next 4 qtrs thus I will keep XRS on my radar and look to buy later in the year if profit growth accelerates. |
One Year Chart |
 This has been an astounding stock — quite a remarkable one year as the Chinese stock market has gotten rocked since August. Great Est. LTG of 29% a year but that 31 P/E isn’t as good as I would like it. Right now the stock market is in the midst of a huge selloff and stocks are cheap. This one isn’t cheap or selling off — and for good reason. |
Fair Value |
 This stock has given us better buying opportunities in the past. Note XRS sold for a 18x earnings in both 2012 and 2013. My Fair Value for 2016 is 30x earnings, or $48 a share. The company has its 2016 fiscal year end at the end of February. |
Bottom Line |
 TAL Education is expanding its tutoring services rapidly throughout China and investors have taken notice. This is one of the only stocks not succumbing to the vicious stock market selloff. But when I look at the ten-year chart I see a stock that’s extended right now. Also, I feel 31x earnings is rich considering profit growth is in a lull. I’ll continue to keep XRS on my radar. |
Power Rankings |
Growth Stock Portfolio
N/AAggressive Growth Portfolio N/AConservative Stock Portfolio N/A |
