Should You Consider New Oriental Education (EDU) as a Good Investment Option?

Davis Funds, an investment management firm, published its “Davis International Fund” fourth quarter 2020 investor letter.  A return of 22.69% was recorded by the fund for the year end of 2020, outperforming its MSCI ACWI benchmark that delivered a 10.65% return in the same period. You can view the fund’s top 5 holdings to have a peek at their top bets for 2021.

Davis International Fund, in their Q4 2020 investor letter, mentioned New Oriental Education & Technology Group Inc. and shared their insights on the company. New Oriental Education & Technology Group Inc. is a Haidian District, Beijing-based private educational services provider that currently has a $25.1 billion market capitalization.

Since the beginning of the year, EDU delivered a -20.67% return, while its 12-month gains are still up by 30.98%. As of April 06, 2021, the stock closed at $14.74 per share.

Davis International Fund has to say about New Oriental

Here is what Davis International Fund has to say about New Oriental Education & Technology Group Inc. in their Q4 2020 investor letter:

“Historically, the Chinese government has focused on market reforms in one or two sectors, which can be disruptive in the short term. In the past, government regulations have focused on sectors such as live video streaming in 2016, for-profit education in 2018 and video games and online video in 2019.

It was disruptive when New Oriental Education & Tech had to ensure 100% of its after-school teachers had teaching degrees. But these reforms had little impact on these businesses’ long-term value, and in the end, it created a more sustainable business environment.”

Our calculations show that New Oriental Education & Technology Group Inc. does not belong in our list of the 30 Most Popular Stocks Among Hedge Funds.

As of the end of the fourth quarter of 2020, New Oriental Education & Technology Group Inc. was in 43 hedge fund portfolios, compared to 40 funds in the third quarter. EDU delivered a -14.38% return in the past 3 months.

About New Oriental

Company is the largest provider of private educational services in China offering a wide range of educational programs, services and products to a varied student population throughout China. New Oriental’s program, service and product offerings consist of K-12 after-school tutoring, test preparation, language training for adults, pre-school education, primary and secondary school education, education materials and distribution, online education, and other services.

New Oriental is listed on NYSE (NYSE: EDU) and SEHK (9901.SEHK) respectively. New Oriental’s ADSs, each of which represents one common share. The Hong Kong-listed shares are fully fungible with the ADSs listed on NYSE.

For more information about New Oriental, please visit http://www.neworiental.org/english/.